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Business News of Sunday, 24 April 2022

Source: thenationonlineng.net

Can Nigeria tackle imminent food crisis?

File photo to illustrate the story File photo to illustrate the story

With looming fears over imminent food crisis across the globe, indications are that Nigeria may not be spared this ugly situation as the country may witness the worst food crisis in decades in the coming months.

The damning verdict by experts is that millions of citizens across the West African sub-region will face food crisis as the vast area is torn by conflicts, drought and other unforeseen circumstances.

From available information, about 27 million people already suffer from hunger. According to experts, the situation could worsen between June and August, with as many as 38 million people needing immediate food aid, or nearly one in 10 people in 14 countries.

In a damning statement published recently, 11 major international organisations including Oxfam, ALIMA and Save the Children, warned that the figure could even rise beyond the projected 38 million except something is done urgently to address the drift.

In Nigeria alone, 12.8 million people could face a food crisis “or worse” this summer, according to the Food Crisis Prevention Network, which includes representatives of governments, NGOs, lenders and UN agencies.

The alert comes a day before a virtual conference on the food and nutrition crisis in the Sahel and Lake Chad.



Since 2015, the number of people in need of emergency food assistance in the region – which includes Burkina Faso, Niger, Chad, Mali, and Nigeria – has nearly quadrupled, jumping from seven to 27 million.

Assalama Dawalack Sidi, Oxfam’s regional director for West and Central Africa said the situation had been worsened by “drought, floods, conflict, and the economic impacts of COVID-19”, which has displaced millions and is “pushing them to the brink.”

“There is not enough food, let alone food that is nutritious enough for children. We must help them urgently because their health, their future and even their lives are at risk,” stressed Philippe Adapoe, Save the Children’s director for West and Central Africa.

The United Nations has estimated that 6.3 million children aged 6-59 months will be acutely malnourished this year, an increase of almost 30 percent from 2021.

With food increasingly scarce, and families increasingly being forced to sell their assets, thus further jeopardising their productive capacity and the future of their children.

Scare over kidnap and banditry

“Food scarcity stares us clearly in the face. Many farmers cannot go to their farms due to threats and fears of herdsmen, kidnappers among other factors. It is not safe to go the farms anymore,” lamented Halilu Abu, a produce merchant in Katsina forced to relocate to Lagos due in order to escape from marauding herdsmen who overran his rice farms.

There are many Abus out who have been forced to abandon their means of livelihoods and thus compounding the food crisis in the country.

Kidnapping and banditry in the Northwest and Northcentral states continues to escalate, leading the government to shut down telecommunication services in Zamfara, Katsina, Kaduna, and Niger states amid military response. The ongoing conflict between the government and armed groups has led to displacement, market disruptions, and limitations to populations engaging in labor and accessing markets.

Besides, macroeconomic conditions have slightly improved alongside increasing international oil prices and demand, contributing to higher foreign reserves. Despite this, the value of the naira continues to depreciate due to high demand for foreign exchange.

“The Sahel crisis is one of the worst humanitarian crises on a global scale and, at the same time, one of the least funded,” said Mamadou Diop, the regional representative of Action Against Hunger. “We fear that by redirecting humanitarian budgets to the Ukrainian crisis, we risk dangerously aggravating one crisis to respond to another.”

Nigeria in desperate search for lifeline

Experts have said Nigeria needs urgent policies to avert food crisis. These experts, easily cite a report by the United Nations Food and Agriculture Organisation which revealed that about 19.4 million people will face food insecurity across Nigeria between June and August 2022.

The report, processed in collaboration with the Federal Ministry of Agriculture and Rural Development -FMARD and other stakeholders, analyses acute food and nutrition insecurity in the Sahel and West African region.

The report said the food crisis will affect Nigerians in 21 states and FCT including, 416,000 Internally Displaced Persons (IDPs).

It noted that about 14.4 million people including 385,000 IDPs in 21 States and FCT of Nigeria are already in the food crisis till May 2022.

Specifically, the analysis for the month of March covered Abia, Adamawa, Benue, Borno, Cross-River, Edo, Enugu, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Lagos, Niger, Plateau, Sokota, Tarba, Yobe, and Zamfara, and the Federal Capital Territory (FCT).

Last year, the FAO estimated that 12.8 million Nigerians will go into famine between June and August 2021.

The report identified insecurity especially insurgency in the North-east states, mostly in Borno, Adamawa and Yobe, armed banditry and banditry in some North-west states such as Sokoto, Katsina, Zamfara and Kaduna States, as well as North-central states of Benue and Niger as key drivers to the upcoming food crisis.

Also, it said high inflation in soaring food commodity prices, which could be associated with an economic downturn, will contribute to the hunger crisis.

“Loss of employment and reduction in household income due to the long-term effect of COVID-19 pandemic and displacement arising from conflict and armed banditry as evident in the crisis-emergency livelihood coping strategies adopted by most households,” it said.

“Among the principal reasons for the increase in the number of people in critical need as against the March, 2021 Cycle could be the objective analysis of inaccessible/hard-to-reach areas (Borno and Adamawa), internally displaced persons (Borno), the increased number of displaced (vulnerable populations) due to banditry, and finally the inclusion of five new states, Contextual Shifts.”

The country representative of FAO, Fred Kafeero, called on the Nigerian government to incorporate the analysis results into national planning, design and implementation of national food systems transformation action plans.

He urged the government to allocate more financial resources to fully support the processes.

Current situation

Despite the ongoing harvest across Nigeria, millions of households continue to have food consumption gaps due to the compounding impacts of conflict, poor macroeconomic conditions, and flooding and dry spells during the rainy season. Population displacement continues in northern Nigeria due to conflict, threatening livelihood and economic activities and humanitarians. The macroeconomic crisis continues, marked by extremely high food prices, increases in the cost of living, and low household purchasing power. Lastly, conflict, flooding, and poor performance of the rainy season in some areas are driving below-average production and household food stocks.

In Borno State, Islamic State West Africa Province (ISWAP) continues to extend its presence in the local communities and along major supply routes. As a result, the military has increased operations to liberate areas and populations as insurgents surrender. As of late September, over 13,000 members of Boko Haram have surrendered. The government is considering closing all IDP camps within the greater Maiduguri area by the end of December 2021.

In the southern areas, kidnapping and insecurity have increased in 2021 with the Eastern Security Network (ESN), formed in late 2020, as the armed wing of the terrorist-designated Indigenous People of Biafra (IPOB) separatist group has increasingly attacked and killed security forces. The ESN has enforced a weekly sit-at-home for the incarceration of the IPOB leader as a protest who remains in the custody of the government security. The conflict has disrupted trade flows and the movement of farmers to their fields to harvest crops.

According to the Central Bank of Nigeria, the annual inflation has eased for the sixth consecutive month to 16.6 percent in September relative to 17.0 percent in August. Although, the inflation rate remains among the highest levels recorded in the last five years. Food inflation dropped to 19.6 percent from 20.3 percent between September and August, which is most likely driven by the availability of the harvest, increasing market supplies. The NGN on the official market is currently exchanging at 415 NGN/USD in late October and 573 NGN/USD on the parallel market. In recent months, the parallel and official exchange rates have continued to depreciate, mainly caused by increased demand and limited market supplies of foreign currencies. Thus, prices of imported commodities and food remain elevated. Furthermore, domestic oil prices remain high, driving up transportation costs, notably in deficit-producing and conflict-affected areas, putting pressure on market food prices.

In hard-to-reach areas of the Northeast, poor households are predominately reliant on very limited own harvest and wild foods. To access market foods, households predominately barter with minimal assets. Those households unable to cultivate are relying on limited food assistance and markets. Consequently, large food consumption gaps and high levels of malnutrition are likely persisting. In August, the joint partner Famine Monitoring System analysis among newly arrived population from inaccessible areas reported severe consumption deficits and concerning proxy SAM rates of 18.1 and 15.4 percent in Bama and Damboa LGAs, respectively.

The Nigerian Naira (NGN) has remained somewhat stable in recent months on the official market. In late January, the NGN was exchanged on the official market at 416 NGN/USD, which is similar to November and December 2021. The value of the NGN on the official market in January depreciated by about nine percent relative to the same time last year. The parallel market rate in January and early February, remained above the official rate, exchanging at 572 NGN/USD as of early February. On the parallel market the NGN depreciated by about 20 percent between January 2022 and January 2021. The depreciation of the NGN is attributable to increased currency demand and constrained foreign currency market supply. The Central Bank of Nigeria announced there will be no allocation of forex to the ommercial banks at the end of December 2022.

Nationally, engagement in dry season agricultural activities is lower than normal, driven mainly by conflict in northern parts of the country. In the northeast, area planted and engagement in the dry season is near the five-year average and higher than last year, while in the northwest and north-central states area planted is lower than the five-year average. The season is being supported by various stakeholders, including the Central Bank of Nigeria (CBN) support for dry season wheat and rice production and the Borno state government support to 500 dry season farmers. The CBN is providing support to about 150,000 farmers for wheat production in 15 states and covering approximately 180,000 hectares of land.

Outlook in few months

Staple food prices are expected to increase through July/August, when they are expected to peak, remaining significantly above average. Prices are anticipated to be higher in conflict-affected areas. Prices would remain seasonally highest and above-average between June and August, although prices will also increase in April associated with Ramadan. Below average food production and rising transport costs will continue to impact staple food prices throughout the outlook period. Given the recent conflict in Ukraine and subsequent sanctions on Russia, there is the potential for disruption to global cereal and fertilizer exports from both Ukraine and Russia. The likely magnitude of these disruptions is still being analysed as events in Ukraine unfold. The potential impacts are further detailed in the Events that Could Change the Scenario.

Kidnapping for ransom and banditry in the Northwest and Northcentral states will continue to increase. The worst-affected states include Zamfara, Sokoto, Katsina, Kaduna, Benue, Plateau, and Niger. As such, banditry will likely escalate from currently elevated levels through May 2022, when the rainy season begins. Starting in June, levels of conflict are expected to level off through at least September.