Food Inflation: The Impact of COVID-19 on Food Demand and Supply in Nigeria.

Food inflation is said to occur when the total demand for food within a given period exceeds supply, leading to an upsurge in the price (Qayyum and Sultana, 2018). It is a reduction in the purchasing power per unit of money as it applies to food, implying too much money chasing too few food items. In simpler terms, food inflation occurs when the value/quantity of food items a consumer can purchase declines as a result of increased prices. While research has shown that food inflation may favour export-driven economies that will benefit from increased prices, it remains a major challenge for countries that depend on imports. Worse hit are developing nations where a shock in food price volatility translates to more persons going hungry and without food. 

According to reports released by the National Bureau of Statistics (NBS) in April 2020, food inflation in Nigeria increased to 14.98% in March 2020 - the highest rate year-on-year since March, 2018. This report was released prior to changes that came with the COVID-19 lockdown measures initiated by the Nigerian government in parts of the country from 30th March 2020. 

Although the Food and Agriculture Organisation (FAO) reported a sharp decline in the world prices of food items such as vegetable oil, cereals, sugar and dairy products except for rice, because of “demand-side contractions associated with the COVID-19 pandemic and the decline in crude oil prices”. The same cannot be said of domestically produced and consumed food items like staples in Nigeria. This is due to a spike in demand and interrupted supply hinged on logistical issues associated with the restrictions in movement. It is expected that demand for food may continue to increase or reach a sustained peak for as long as the full or partial lockdown persists, with production almost unaffected for as long as farmers remain uninfected and are encouraged to continue with farming activities. But sustained supply related issues from both ends of agricultural inputs to farmers and output commodities to consumers despite continued production may lead to an upsurge in Consumer Price Index (CPI) which will lead to higher rates of food inflation if left unattended.

Therefore, the likelihood of a COVID-19 induced food inflation to occur would be hinged on containment measures, inhibiting supply and consumer panic behaviour, increasing demand. This is a deviation from the conventional causes of food inflation such as climate change, high oil prices, and world trade policies. Consequently, if adequate measures are not put in place, food inflation may become a term synonymous with the world’s current order – a period described as the “new normal” and characterized by never-before-seen challenges and the need to develop new survival strategies. 

The need for countries to look inwards is imperative. This could be achieved by intensifying local production, opening up reserves, researching on improved ways to manage supply chains domestically and across borders for countries highly dependent on imports. Achieving this provides more opportunities for farmers who are able to take advantage of increased demand for staples as full and/or partial lockdowns are in effect. Some measures to manage the current situation and prevent more spikes in food prices would be the implementation of food price stability by the government, linking farmers to market programmes, deliberate efforts to support the supply of agricultural commodities as well as the intensification of research and knowledge sharing amongst relevant stakeholders.

PS: At the point of publishing this article, the National Bureau of Statistics’ latest report revealed that food inflation in Nigeria for April spiked to 15.03% from 14.98% in March as local markets in some parts of the FCT - the country’s capital - are running out of stock of fresh food items mostly imported from the far North as restrictions on inter-state movements persist. Although the increased inflation rate is only about 0.05% increase from March to April as against a 0.08% increase from February to March 2020, measures still need to be put in place to prevent a sustained increase.

References:

Food and Agriculture Organisation (2020): World Food Prices Drop in March. Available at http://www.fao.org/news/story/en/item/1269050/icode/

National Bureau of Statistics (2020): Selected Food Prices Watch, March 2020. Available at https://nigerianstat.gov.ng/elibrary

National Bureau of Statistics (2020): CPI and Inflation Report, April 2020. Available at https://nigerianstat.gov.ng/elibrary

Trading Economics (2020): Nigeria Food Inflation:1996-2020 Data | 2021-2022 Forecast | Calendar | Historical. Available at https://tradingeconomics.com/nigeria/food-inflation 

Qayyum, A. and Sultana, B. (2018): Factors of Food Inflation: Evidence from Time Series of Pakistan. Journal of Banking and Finance Management, 1 (2), 22 – 30

The Author

Ogbole Esther.

''As an agricultural enthusiast, I have long had a passion for contributing my quota to the growth and development of the Nigeria agricultural sector and this birthed an interest in research to see what and how precisely agricultural strategies are implemented in developed economies of the world and how they can be adapted to suit the Nigerian scenario''.

 

 

 

 

Rebuilding for better: Policies for post-COVID-19.

For a long time, one of the reasons deemed responsible for slow progress in the diversification efforts of economies in parts of sub-Saharan Africa was Rural-Urban Migration, which has seen large numbers of young people moving into the already crowded big cities in search of better opportunities. Informal job roles in rural communities within the agriculture value chains have been abandoned for ‘decent’ employments in cities, leaving fewer hands to produce our much-needed farm foods and resurrect our economies through the exportation of cash crops. This begs the question, ‘what happens after the coronavirus pandemic?' What will be the new normal for food production, cost of inputs and access to new markets, with jobs lost and businesses shutting their doors for good, what policies should be adopted to help us rebuild our food systems for a food-secure future.

The world found ways to move on from several plagues in the past, such as, the Black Death (1346-1353), which was said to have changed the course of Europe’s history, the Flu pandemic (1889-1890) killing over a million people, the Spanish flu (1918-1920) of over 500 million cases of which no less than one-fifth died from it, and many others. One similarity about these past incidents is that the world devised ways to re-build all that was lost and move on, but what about lessons learnt? Especially on how vulnerable and outdated our systems are.

Before the Covid-19 global pandemic, the United Nations had a global target of ending hunger and poverty (SDGs 1 and 2) among 15 other goals, by the year 2030, it was projected that the global food production will need to increase by anywhere from 25-70% between now and 2050 in order to feed our growing population. These projections from available data, informed food policies in many countries of the world and formed bases for intervention programmes in developing countries. Now, more than ever, the impact of Covid-19 on achieving sustainable development goals 1 and 2 is likely to cost us additional years than earlier planned as we have seen a rapid rise in the number of hungry children and families around the world. Local economies are halted, and countries are at the verge of falling into a recession. The affordability and accessibility to essential food items are limited in vulnerable communities, leaving many households hungry and impoverished

Post-COVID-19 will see drastic changes in many sectors around the world, for sub-Saharan Africa to build on lessons learned from this global pandemic, re-building for a better food system will require: 

• Drawing lessons from previous events to design better policies: Policies that facilitate the transfer of food products to places where they are most needed, policies around the export of agricultural products and Fairtrade.
• Developing standards for agriculture in emergencies: Ensuring access to food in the middle of a global pandemic was never considered by most governments of developing countries, developing a working plan for similar incidence gives us a better fighting chance against future pandemics.
• Investing in environmental and sustainable food production research: Investing in research aimed at sustainable ways of growing our food without causing harm to our environment is vital as climate change, in a few years maybe more severe than a global pandemic.
• Prioritizing the needs of those who grow our food: The people who grow our food are some of the poorest in our communities and the least considered for capacity building opportunities and capital incentives.
• Appropriate budgeting for the agricultural sector: Adequate budget allocation will increase the reach of intervention programmes, capacity building and technological advancement in sub-Saharan Africa’s agriculture.
• Resume an inquiry into existing ministries of agriculture, environment and other regulatory agencies to understand the work that they do and how this has changed over the years in line with the needs of our growing population.

Our collective effort will determine how effectively we rebuild our communities, countries and economies post-COVID-19, embracing changes we have seen as effective and modifying those that are less effective. Young people in agriculture, especially, have a role to play in building a more-resilient food sector within our different countries.

 The Author

Lilian Umeakunne

Lilian Umeakunne is a food security and livelihoods specialist devoted to making a change in African Agriculture. Follow her on social media to share your thoughts and contribute your ideas to solving Africa's greatest problem - hunger and poverty.

Handles
LinkedIn: Lilian Umeakunne
Twitter: @Lily_Umeh
Facebook: Lilian Umeakunne.

COVID-19 Pandemic - impact on Food Security in sub-Saharan Africa.

Ensuring access to safe and nutritious food during the COVID-19 pandemic is pivotal to saving lives among the most vulnerable as food prices increase drastically in parts of sub-Saharan Africa. As the regulations are tightened to prevent further spread of the virus, food supply chains are strained due to bottle-necks in transporting food products from point A to B. Before now, rural communities have had to deal with challenges facing the agricultural sector such as the limited  market for their produce, which now exposes vulnerable communities to hunger and starvation during this time. The Covid-19 pandemic not only affects significant elements of both food supply and demand but also exposes the lapses in our food systems with insight on areas we should look to strengthen in the future.

As countries are on either partial or full lockdown, people who depend on wages have lost their income-earning opportunities which have greatly impacted purchase/consumption and access to safe nutritious food. There have also been few changes in consumer behaviour, such as fewer visits to site markets (slaughterhouses), hoarding and dietary changes due to fewer food choices brought about by unavailability and increased cost of food. Unless we keep global food supply chains alive, food crises are likely to affect the most vulnerable during the global pandemic. The lessons from the Covid-19 pandemic will inform our food policies for years to come.

Border closures, lockdown regulations and market and supply chain disruptions could restrict people’s access to safe, sufficient, nutritious food especially in communities hit hard by the coronavirus or previously at risk of food insecurity. Prices of food have seen an unprecedented rise in the past few weeks in different parts of Africa and may continue to rise as food vendors report that restrictions on travel and high transportation costs make it harder and more expensive to move food products to places where they are needed. Food imports are one of the ways countries in the region supplement local production to meet the growing demand for food and food products, with international food export on halt, countries who depend largely on importation are facing great challenges in accessing enough food especially staples such as rice.

Local food production has been suspended by companies in lieu of government regulations to protect staff and the public, locally sourced staples have seen a great price jump threatening food and nutrition security in vulnerable communities. Food and nutrition security in sub-Saharan Africa before now have struggled to receive the attention it deserves from government and policymakers which has increased the vulnerability of our food systems and our ability to manage our food supply amidst the global pandemic.

Recommendations

To avoid disruptions to the food supply chain and food production, the Food and Agriculture Organization (FAO) is urging all countries to:

• Keep international trade open and take measures that protect their food supply chain (from obtaining inputs such as seeds to assuring smallholder farmers have access to markets to sell their produce).
• Focus on the needs of the most vulnerable and scale-up social protection programmes including cash transfers.
• Keep their domestic food supply value chains alive and functioning.
• Taking all necessary precautions, seeds and planting materials must continue to flow to smallholders; animal feed to livestock breeders; and aquaculture inputs to fish farmers. Agricultural supply chains should be kept alive in-line with health safety concerns.
• Maintain agricultural activities.

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The Author.

Lilian Umeakunne

Lilian Umeakunne is a Food security and livelihoods specialist devoted to making a change in African Agriculture. 
Follow her on social media to share your thoughts and contribute your ideas to solving Africa's greatest problem - hunger and poverty.

Handles
LinkedIn: Lilian Umeakunne
Twitter: @Lily_Umeh
Facebook: Lilian Umeakunne.