#EndSARS Protest to Worsen Food Crisis as Borders Remain Shut
The rising food inflation rate in Nigeria has become a pressure point, an aftermath effect of border closure as investment analysts have indicated.
Unfortunately, the ongoing protest across the nation has worsen things for Nigerians food items become scarce.
With Nigeria’s land borders under lock, pressure continues to rise following steep increase in prices of food items and other related daily needs.
Also on the rise is electricity bills, especially for unmetered consumers captured under estimated payment model.
Transport fare, pharmaceuticals products and medical services are also in the pack contributing to the pressure.
MarketForces visits to some markets in the country discovered that most of daily needs have become so unaffordable.
Leading the market survey, MarketForces Africa Marketing Researcher Ogochi Ndubuisi in her reported that all food items are expensive, excluding some Northern parts of the country.
In her report, she said: “Everything has become so expensive such that monthly take-home cannot take working class home”.
This is an aftermath development associated with the Nigeria’s border closure, analysts told MarketForces Africa.
This is happening in at the time when government is struggling to paying N30,000 minimum wages.
Meanwhile, the minimum wage offer is equal to getting a bag of local rice cost per month without considering pay as you earn tax consideration.
In the foreign exchange market, Nigerians are paying as much as N470 to obtain United States dollar, though minimum wage in dollar term stands at $79 per month.
Some think there is foods crisis, but many analysts are also pointing to lack of comparative country advantage.
The government policy choice which seeks to protect local industries is making people to pay more for goods and services – food, clothing and logistics, especially.
Saying households are paying more for foods is an understatement, many families are already struggling to meet daily needs unsuccessfully.
Consensus analysts’ estimate about inflation attributed rise in prices to government decision to close land border.
Meanwhile, despite intervention by the Central Bank of Nigeria, prices of rice and other agricultural produce are becoming luxury for average families.
While prices of foods items are becoming unbearable, unemployment rate and unstable income for families make things worse.
MarketForces survey indicates that many families with fixed income sources are slipping down the ladder as purchasing power trending low.
Unfortunately, this is not a country where income level adjust to price instability, analysts told MarketForces.
With COVID-19 on the street, basic human needs like foods, housing, shelter and transportation for mobility purpose have jerked up significantly.
It would be recalled that there have been questions around effectiveness of the Nigeria’s government border closure policy initially by critics.
But uncontrollable increase in prices of household goods has cast aspersion on the effectiveness of Federal Government land border closure.
Apparently, the policy has neither produce nor safe jobs based on data provided by the National Bureau of Statistics.
Unemployment rate in Nigeria kissed the sky at 27.1%, with more than 60% of youths accounting for large proportion.
With average price level rising on daily basis across various states, critics have been proven right that border closure would limit availability of substitutes as Nigeria’s misery index worsen.
National Bureau of Statistic revealed that food index jumped 66 basis points to 16.66% year on year, dominated by increases in prices of farm produce and staple food prices.
In its macroeconomic note, NOVA Merchant Bank pinpointed that the increase reflects the impact of food shortages.
This was more than outweighed the decline in core inflation during the month of September.
Specifically, analysts said headline index excluding farm produce contracted 11bps to 0.94% month on month.
When further adjusted for energy related cost, the headline index fell 15bps relative to the prior month.
According to FEWSNET, the rising prices of food (emanating from farm produce) is largely a result of exacerbated flooding in localized areas of the Northeast and atypically high staple food prices during the extended lean season from April/May through the end of September.
Reflecting the jump, the headline inflation expanded by 13.71%, coming ahead of August level of 13.22%.
Though, it fell below NOVA’s estimate of 13.82%.
Data shows that both the food and core index expanded 66bps and 6bps to 16.7% and 10.58% year on year respectively.
Of the various constituents that formed the bedrock for inflation rate, people are more concern with basic needs of life.
Interpreting NBS data, transportation cost has increased 45 basis points, health cost rise basis points and clothing also surged 21 basis points to 11.65%, 12.58% and 11.02%.
The tones in the street is a bit worsen than what mere data can explain.
Nigerian misery index is widening, hungers and deprivation explains some citizen irrational behaviours.
The macroeconomic data indicates that price level is becoming more unable month on month.
NOVA said relative to the same period in the prior year, the food index is 315bps higher than the September 2019 level of 13.51%.
Unfortunately, border closure has not stopped rice smuggling into the market. However, there is a small margin between foreign and local rice.
The fact that land border closure has locked out substitute products, local producers are selling their inefficiency and of course greediness to Nigerians.
The government has indicated the need to sustained land border closure while using social welfare policies to support people.
Unfortunately, the social welfare packages have not have remarkable impacts despite humongous amount budgeted and spent so far.
It was also discovered that the process for distribution of such packages have been fraught.
While COVID-19 lockdown has been eased, poverty level in Nigeria may have peaked when considered the numbers of people without jobs, the wage and inflation rate at this time.
Read Also: Rivers AFAN chairman decries lack of organised produce market
#EndSARS Protest to Worsen Food Crisis as Borders Remain Shut
The post #EndSARS Protest to Worsen Food Crisis as Borders Remain Shut appeared first on MarketForces Africa.
source https://dmarketforces.com/endsars-protest-to-worsen-food-crisis-as-borders-remain-shut/