The World Bank has raised alarm over the threat of insecurity and COVID-19 pandemic on Nigerian households’ food security.
The World bank in a new paper, “COVID-19 in Nigeria: Frontline Data and Policy Pathways,” released Friday night in Washington, said that Nigeria “already faced significant development problems,” and that the epidemic “continues to alter health outcomes, human capital accumulation, family poverty and coping methods, and labor-market dynamics.”
The report follows similar concerns expressed by prominent Nigerians such as former governor of Sokoto State, Alhaji Attahiru Bafarawa, and Minister of Defense, Major Gen Bashir Magashi, retd, as well as investment experts, the Organised Private Sector, OPS, and other international bodies, about the impact of insecurity on food security in the country.
The report contradicts NBS inflation data
The claim, however, contradicted the National Bureau of Statistics (NBS) latest inflation report, which showed that Nigeria’s inflation rate slowed for the seventh consecutive month in October to 15.99 percent YoY in October, down from 16.63 percent in September 2021, and that food inflation, the main driver of headline inflation, fell to 18.34 percent YoY in October, down from 19.57 percent in September 2021.
However, investment analysts have ascribed the slowdown in core and food inflation to the base effect beginning in 2020, claiming that pricing pressures such as low harvest volumes, persistent supply chain bottlenecks, and limited access to FX through official channels remained considerable.
Insecurity, floods drive food prices up
“Prices of farm produce grew by 6 basis points to 1.13 percent m/m (September: 1.07 percent m/m) despite October being the key harvest season,” analysts at Cordros Capital, a Lagos-based investment banking firm, said. According to our channel inspections, the harvest was below average due to ongoing security issues, fewer than usual availability to inputs due to lower-than-average revenue, and flooding.
“In fact, according to the Famine Early Warning Systems Network (FEWSNET), prices for both staple and cash crops are still much higher than the five-year average and last year. Furthermore, we believe that consumers have begun front-loading food purchases in expectation of a holiday-induced price hike in the last two months of the year.”
Impact of COVID-19, insecurity severe
Meanwhile, the World Bank research revealed both the magnitude of these effects on Nigerians as well as viable policy solutions for accelerating the country’s recovery.
The report uses novel sources of high-frequency data, such as the Nigeria COVID-19 National Longitudinal Phone Survey, NLPS, to help Nigeria’s leaders make informed decisions.
“The analysis reveals that the COVID-19 crisis’ effects for human capital, livelihoods, and welfare are proving to be severe,” the World Bank said.
While many schools in Nigeria have reopened, learning that was lost during the COVID-19 crisis must still be recovered, and some children have not returned to school.
“While many Nigerians have returned to work, the employment they have taken — primarily in small-scale non-farm enterprises — may not provide economic security, making it difficult for families to overcome poverty.
” With the COVID-19 crisis bringing with it accompanying shocks – particularly in terms of food costs – and social support remaining scarce, households’ food security and overall well-being are jeopardized.
‘Additional 6 million Nigerians going into poverty’
“The price increase between June 2020 and June 2021 alone could push another six million Nigerians into poverty, with urban areas bearing the brunt of the impact.
“This emphasizes the importance of short-term welfare initiatives. According to basic models, the percentage of Nigerians living below the national poverty line might have risen from 40.1 percent to 42.8 percent between June 2020 and June 2021 due to food price inflation. This will result in an additional 5.6 million Nigerians living in poverty.
While rising food prices will reduce purchasing power and increase poverty throughout Nigeria, it appears that urban regions may be affected.
“About 16 percent of poor Nigerians lived in cities in 2018/19. However, roughly 27% of people who would be newly impoverished as a result of rising food costs between June 2020 and June 2021 would be from metropolitan regions. Nonetheless, with or without rising food costs, Nigerian poverty will continue to be predominantly a rural phenomenon.”
The findings highlighted the importance of comprehensive reforms to improve Nigeria’s economy and development outcomes.
The World Bank Country Director describes it as a “wake-up call.”
“The COVID-19 issue has presented a wake-up call to address the long-standing structural challenges that potentially impede the government’s objective to move 100 million Nigerians out of poverty,” Shubham Chaudhuri, World Bank Country Director for Nigeria, stated in response to the report. There is no better time than now for the country to prepare for future climate and war shocks, as well as to capitalize on the promise of its young population to establish strong foundations for equitable growth.”
To limit the virus’s direct health impact, the research recommended that immunizations be distributed rapidly and evenly.
He went on to say that helping children recover from the pandemic’s learning losses – whether by returning them to school or finding low-tech remote solutions that work for the poor – would be critical, as well as expanding social protection, which could provide short-term relief for the welfare losses currently faced by Nigerian households. As a result of the security difficulties, farmers in the Central Bank of Nigeria’s Anchor Borrowers Program are defaulting more frequently (ABP).
According to a recent report by the CBN, of the N615.4 billion disbursed to farmers since the program began in November 2015, just N152.3 billion, or 25% of the total loans, had been repaid, while N463 billion, or 75% of the entire loans, remained unpaid.
“A total of N615.4 billion was disbursed to 3.04 million beneficiaries under the Anchor Borrowers Programme, of which N152.3 billion was repaid,” the CBN added in the report.
Food distribution issues are being exacerbated by insecurity – Bafarawa
Meanwhile, Alhaji Attahiru Bafarawa, a former governor of Sokoto State, bemoaned the worsening of supply chain problems, claiming that farm commodities cultivated in the country’s north-west could not be delivered to markets due to insecurity. “This instability has befallen us like a disaster.” Only those who have visited the states of Sokoto and Zamfara can describe the situation.
“The sad part is that we all know that the federal government is in charge of the nation’s security. Are those individuals assuring President Muhammadu Buhari that everything is fine, or are they informing him that things are not fine? If they tell him everything is alright, they have deceived him, and we have been deceived as well. Allah is aware that we are in the midst of a major disaster in our area. I returned from my trip home today.
Not because someone informed me, but because I am an eyewitness. Our folks are harvesting millet in large quantities, and we’ve received millet and rice, but they are unable to transport the farm produce home. Whoever went to the farm to transport the crops home will perish.
“Whoever goes to bring his rice home will not return alive.” Furthermore, as in Zamfara, people are incarcerated in some way. He described the situation as “a terrible calamity,” in which “phones are not working, markets are closed, and there is no palliative for the poor to cushion the effect, to find food to eat.”
There is a need for collaboration among security services – Magashi
In a similar vein, the Minister of Defense, Major General Bashir Magashi, retd, stated that the existence of security concerns in many sections of the country was compromising not just economic growth but also food security, and urged security services to work together to combat the threat.
“The threat has made it important for the various security agencies in the country to unite to combat the problem in order to provide the enabling environment for economic activities to grow and attract foreign direct investment, FDI,” Magashi said recently at the beginning of the 2021 Defence Advisers/Attaches Annual conference in Abuja.
“It also implies that security organizations must look into all avenues available to them within their various systems in order to come up with novel ways of detecting and fighting the difficulties we face as a country.” Boko Haram terrorist assaults and ISWAP strikes in Nigeria’s northeast continue to pose severe security challenges.
“In the North-West and North-Central zones, armed bandits, armed herders/militia attacks, and kidnappings are common; in the South-South, illicit oil bunkering, piracy, and militancy are common; and in the South-East, secessionist activities of the Indigenous People of Biafra are common.”
LCCI calls for decentralization of the security ecosystem
Mrs. Toki Mabogunje, President, Lagos Chamber of Commerce and Industry, LCCI, also expressed alarm over the country’s food problem, noting that the destruction of farmlands across the country has continued to undermine the agricultural sector, putting pressure on food inflation.
She claimed that the crisis had harmed many private and public investments around the country and that several businesses and investors in the impacted areas were already tallying their losses.
“These have far-reaching consequences for food production and delivery from fields to markets.”
‘’ We identify food insecurity as a major contributor to the current rise in food prices. The deterioration of the security situation will increase inflationary pressure on food prices, increasing the country’s poverty.
“The country’s worrying level of insecurity has restricted the flow of goods, services, and people across the country, affecting agriculture, agro-allied services, trade, and commerce, particularly in afflicted areas.”
“The crisis portrays the Nigerian economy as a risky investment destination, thwarting government efforts to encourage private investment inflows at a time when the country is in desperate need of major investments to strengthen development, create jobs, and alleviate poverty,” she added.
The United Nations World Food Programme has issued a warning.
Also, earlier this year, the United Nations World Food Programme warned that Nigeria, along with five other African countries, including Burkina Faso, Ethiopia, Madagascar, South Sudan, and Yemen, had pockets of people in Integrated Phase Classification (IPC/catastrophe) Phase 5.
In a statement, the World Food Programme warned that around 0.5 percent (41 million) of the world’s population was on the verge of starvation this year, requiring $6 billion in financing to escape the crisis.
According to the World Food Programme, 584,000 people in Ethiopia, Madagascar, South Sudan, and Yemen are already suffering from famine-like conditions (IPC phase 5/catastrophe).
Nigeria and Burkina Faso are also of worry since they have had pockets of persons in IPC phase 5 in recent months.
“I am heartbroken at what we’re facing in 2021,” WFP Executive Director David Beasley remarked. There are presently four countries in which famine-like circumstances exist. Meanwhile, 41 million people are on the verge of starvation. It’s awful when you look at the figures; these are real individuals with real names. “I’m terribly worried.”
Last month, in October 2021, the UN agency warned that it may soon be forced to halt food supplies for more than half a million women, men, and children in North-Eastern Nigeria unless immediate financing is secured to continue life-saving operations in the crisis-ridden regions of Borno, Yobe, and Adamawa.
The cuts would come as severe hunger in the country approaches a five-year high, following years of conflict and insecurity – a scenario exacerbated by the socioeconomic consequences from COVID-19, high food costs, and a limited food supply. Furthermore, in September 2021, the number of internally displaced people topped two million, marking yet another sad milestone.
“Reducing rations entails deciding who eats and who goes to bed hungry. Following a recent visit to Nigeria, Chris Nikoi, WFP’s Regional Director for West Africa, stated, “We are seeing financing for our life-saving humanitarian work dry up right at the moment when hunger is at its worst.”
Similarly, the Agriculture Industry Report 2021, published by Sterling Bank and StearsData, revealed that Nigeria’s agriculture industry is under-performing due to inefficiencies that have hindered and hampered the sector’s growth.
The paper looked at the country’s agriculture value chain, the situation post-COVID-19, the climate change problem, and innovation and investment potential.
Continued reliance on trade restrictions as a primary tool for stimulating local production, according to industry experts in the report, will undermine supply and expose consumers to significant price fluctuations, making food security elusive as population growth places more strain on food resources.