A downstream of sales has hit the Nigeria Market due to rising inflation which has made staple foods including rice and pasta less affordable for many Nigerians as with a massive low sales to the lowest in five years, according to a new report by a global market research provider.<\/p>\n
The staple foods, which make up a chunk of households\u2019 meals, include yams, cassava, maize, plantains, potatoes, sorghum, soybeans, sweet potatoes and wheat.<\/p>\n
According to the report, titled \u2018Staple Foods in Nigeria\u2019 by Euromonitor International, shows that sales volume in the formal market declined marginally for the second straight year to 2.57 million tonnes last year from 2.47 million tonnes in 2022.<\/p>\n
\u201cStaple foods saw a decline in both retail and foodservice volume sales in 2023, despite most categories being considered essential by local consumers,\u201d it said.<\/p>\n
As stated by the market researcher, It said poor economic conditions, exceptionally high inflation and limited consumer purchasing power forced Nigerians to resort to rationing or to seek substitute unpackaged staple foods.<\/p>\n
\u201cSocial activities such as parties, which contribute substantially to demand, declined during the year due to weakened consumer purchasing power. However, high average unit prices drove strong current value growth for the category,\u201d the report said.<\/p>\n
Furthermoren as stated by the portfolio manager at FBNQuest, Gbolahan Ologunro, he said a large number of consumers are unable to earn enough income and are forced to reduce their consumption.<\/p>\n
\u201cAnd it is now worrisome when you are now seeing it on staples, which are essential. The usual reaction would be to cut down on discretionary spending. But seeing it on essentials is reflective of how severe those things are confronting consumers,\u201d he added.<\/p>\n
Analysis breakdown of the staple foods data show that consumption of breakfast cereals dropped to 35.8 million tonnes in 2023 from 38.2 million in 2022 and processed fruit and vegetables reduced to 7.4 million tonnes from 8.2 million.<\/p>\n
Processed meat, seafood and alternatives to meat declined to 6.4 million tonnes from 7.1 million tonnes; baked goods dropped t0 1.25 million tonnes in 2023 from 1.31 in 2022; and rice, pasta and noodles fell to 1.17 million tonnes from 1.21 million.<\/p>\n
\u201cEssential staple foods such as bread, rice, pasta and noodles saw volume decline, but more niche categories considered less essential, such as cakes, processed meat and seafood, and frozen processed potatoes, declined even further,\u201d the report said.<\/p>\n
Over the past seven months, the inflation rate in Africa\u2019s biggest economy has accelerated to the highest in 18 years largely on the back of the Federal Government reforms including the removal of petrol subsidy and naira devaluation.<\/p>\n
According to the National Bureau of Statistics (NBS), inflation rose to 28.2 percent in November last year from 27.33 percent in October.<\/p>\n
Food prices, a major contributing factor to the surge in the inflation rate, are also at their highest in 18 years. Food inflation rose to 32.84 percent in November from 31.52 percent in October.<\/p>\n
The price of an agric egg rose by 36 percent to N110.1, a kilo of frozen chicken increased by 37.5 percent to N3,645.9 and a kilo of yam tuber grew by 83.5 percent to N772.7.<\/p>\n
\u201cEconomic conditions in Nigeria were challenging in 2022, as a depreciated local currency impacted inflation. However, conditions worsened in 2023 as demonetisation policies and fuel price hikes exacerbated inflation,\u201d authors of the Euromonitor report said.<\/p>\n
They added that with local consumers spending more on fuel, further rationing and the search for substitute foods increased.<\/p>\n
Analysts at SBM Intelligence said in a recent report that despite cost-cutting and inflation management measures, Nigerian households spend 97 percent of everything they earn solely on food.<\/p>\n
\u201cThe Tinubu administration has its work cut out \u2013 arresting spiralling insecurity, tackling grinding poverty, enhancing economic opportunity and forging a sense of national consciousness. It is safe to say that it is not off to a great start,\u201d they said.<\/p>\n
The World Bank\u2019s latest Nigeria Development Update report revealed that rising inflation and sluggish growth in Africa\u2019s most populous economy increased the number of poor people to 104 million in 2023 from 89.8 million at the start of the year.<\/p>\n
This means that from January to November, an additional 14.2 million people fell into poverty.<\/p>\n
\u201cThe impact of this inflation is especially hard on the poor and vulnerable. The Government has initiated targeted cash transfers to mitigate some of the impact on the most vulnerable households. In addition, a holistic approach to reducing inflation, including through tighter fiscal and monetary policies, is also needed,\u201d the report said.<\/p>\n
An outlook report by the Food and Agricultural Organization, World Food Program, and others projected that Nigeria and other countries across the West Africa region are expected to see increased prices of staple foods such as rice, maize, millet, and cereals, among others, in 2024.<\/p>\n
\u201cStaple prices currently remain above the five-year average across the region. This is attributable to a combination of factors including production deficits, trade restrictions, insecurity in the Sahel, elevated global prices, high transaction costs, and currency depreciation in the coastal countries of the Gulf of Guinea,\u201d it said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
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