According to the World Bank, increasing food costs in Nigeria might force an additional six million Nigerians into poverty.
"The spike in prices experienced between June 2020 and June 2021 alone might force another 6 million Nigerians into poverty, with urban areas being disproportionately affected," the World Bank noted in COVID-19 in Nigeria: Frontline Data and Pathways for Policy.
The National Bureau of Statistics (NBS) said on Monday that the annual food inflation rate increased for the 24th month in a row to 20.75 percent in October from 20.71 percent in September, owing to higher costs for essential food products.
According to the NBS's Consumer Price Index, CPI, and Inflation Report for October 2021, "this rise in the food index was driven by rises in the prices of food goods, coffee, tea, and cocoa, milk, cheese and eggs, bread and cereals, vegetables and potatoes, yam and other tubers." As a result, the food inflation rate has climbed by 7.38 percentage points since May 2019, when it was 13.37 percent.
According to the World Bank, "the percentage of Nigerians living below the national poverty line might have grown from 40.1 percent to 42.8 percent as a result of food price inflation seen between June 2020 and June 2021." This equates to an additional 5.6 million Nigerians.
being impoverished
While rising food prices will reduce buying power and increase poverty across Nigeria, it appears that urban regions would be disproportionately affected.
In 2018/19, around 16% of impoverished Nigerians lived in cities.
However, around 27% of individuals who would become newly destitute as a result of the increase in food costs between June 2020 and June 2021 would be from metropolitan areas.
The World Bank linked the rise in food costs to COVID-19.
According to the global organization, although the first phase of the COVID-19 crisis resulted in a worldwide economic downturn that generated a recession in Nigeria, the second phase was marked by rising inflation.
According to the bank, "in April 2021, the year-on-year inflation rate was the highest in four years, with food costs accounting for more than 60% of the entire rise in inflation."
"Indeed, Nigeria had its biggest spike in food-price inflation in over two decades in 2020 and 2021." This inflationary pressure is caused by a combination of supply and demand variables, many of which are directly related to the COVID-19 situation.
"On the supply side, the epidemic and lockdown measures may have hampered food production and market access, increasing the consequences of restrictive trade regulations, such as the closing of Nigeria's land border in August 2019."
"On the demand side, enterprises and people anticipate price increases during economic shocks and factor this into their investment and consumption decisions."
The World Bank voiced worry that maladaptive coping mechanisms might jeopardize current wellbeing while having long-term consequences.
It noted, "Food insecurity may have long-term effects for human capital, as child stunting was pervasive in Nigeria prior to the epidemic, and malnutrition can damage children's learning ability."
Along with other pressing goals for Nigeria, such as vaccine rollout and recouping learning losses, scaling up social protection – including the use of innovation –
The bank also stated that a lack of social protection exposed residents to huge welfare losses, stating that prior to the pandemic, less than 2% of Nigerians lived in a household registered in the National Social Safety Net Project (NASSP), with coverage of most other programs much lower.
The World Bank urged Nigerian authorities to stop the spread of COVID-19 by distributing vaccinations rapidly and equitably as a foundation for recovery. It also entrusted the government with putting in place mechanisms to recoup learning losses suffered during the first year of the epidemic, as well as strengthening social protection to improve household welfare.
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