Abdulmalik Adetola Lawal
The quarterly food import allocations by the Central Bank of Nigeria (CBN) are intended as a short-term solution to stabilize food supply and curb inflation, but this approach, despite substantial funding, has seen limited success. The CBN allocated ₦1.7 trillion for food imports in the first half of 2024, aiming to address food scarcity and inflation.
However, the actual results have fallen short of expectations. The primary reason for this heavy import reliance is Nigeria’s low local food production. With over 84 million hectares of arable land (Global Yield Gap Atlas), Nigeria continues to import foods that could be produced domestically.
In the second quarter of 2024, the CBN released $547.7 million (₦823.19 billion at the official exchange rate of ₦1,503.3/$1 as of June 30, 2024) for food imports, representing a 20.6% reduction from the $689.88 million recorded in the first quarter.
However, despite this decrease, food inflation continued to rise each month. Research on CBN’s food import funding shows a high consumption of imported foods in Nigeria. In 2023, the CBN’s food import allocation concluded at $126.2 million in December, yet by June 2024, it had increased to $197.22 million. Without addressing the root causes, such as low domestic production, these disbursements are unlikely to reduce food inflation, which has made food increasingly unaffordable for Nigerians.
In July, the federal government announced a plan to reduce food commodity prices by implementing zero duty on select essential food items, including husked brown rice, wheat, and cowpeas.
This measure aims to address the high cost of food imports, but bureaucracy has hindered its effectiveness. Delays in processing the 150-day duty-free import window have contributed to food inflation, which rose from 40.87% in June to 37.77% in September. This suggests that cutting bureaucratic delays could help stabilize food supply and reduce inflation.
It’s essential for the federal government to recognize that short-term policies alone are insufficient to combat food insecurity. Heavy reliance on food imports exposes Nigeria to economic vulnerability and weakens the naira. The government must pursue long-term solutions to sustain economic growth, while short-term fixes provide only temporary relief from rising food prices.
Agricultural development should be a priority for achieving economic sustainability. Sustainable economic growth is attainable when agriculture is leveraged as a source of revenue and investment.
Over the years, stakeholders have urged the government to fund agriculture to achieve food security and zero hunger by 2030, but the government has often neglected these calls. In the 2024 budget, only 3.51% was allocated to the agriculture sector, which falls short of the 10% recommended by the Malabo Declaration. The government should invest in agriculture, particularly by supporting farmers who grow staple crops, such as rice, that are heavily consumed by Nigerians. This could include providing rice farmers with seeds, machinery, and zero-interest loans, leading to lower production costs and increased supply.
The persistent security challenges facing Nigeria have also impacted the agriculture sector. Reports of farmers being attacked or having crops destroyed are deterrents to farming. For instance, a Reuters report highlights the experiences of two farmers from Katsina State, Hassan Ya’u and Musa Nasidi, who stopped farming after gunmen killed 50 farmers from their community. Such incidents have forced many farmers to abandon their fields, contributing to rising food prices.
To address this, local governments must implement ward-level policing to provide security for farmers and their crops. The smallest political units, wards, could employ capable security personnel to monitor farms. Digitized security measures could also be introduced, allowing other security agents to respond quickly to intrusions. This localized security approach would complement the efforts of national law enforcement in tackling insecurity.
Although the federal government is often blamed for Nigeria’s economic struggles, all levels of government should be held accountable. Local governments, with their closer proximity to citizens, can play a significant role by empowering local farmers. With local government involvement, food prices could decrease, benefiting citizens across the country.