The spike in the market prices of major commodities globally has been a concern for many nations around the world. Nigeria, like others, also faces severe threats to its already wobbly food security position.
Stakeholders believe that Nigeria, a country that is heavily dependent on food importation, needs to urgently review certain structures, bureaucracies and bottlenecks within its agencies’ systems and operations.
They said while the federal government can do little about the prices of the global commodities, at least, it can review the nation’s local port duties, charges and levies that add to the overall import bills of food commodities sourced from elsewhere to bridge the shortfall in the segments where local capacity is well below demand level.
According to an agriculture economist, Emo Fasina, the port tariffs slapped on imported food commodities is making life difficult for food manufacturers. He specifically said that the Nigeria Customs’ arbitrary duty evaluation structure strongly impacts operating costs for food processors.
He said, ‘‘This reality is quite disturbing. The prevailing local operating conditions are austere. Of course, epileptic power supply, high fuel prices and a dearth of reliable logistic infrastructure, multiple taxation, inadequate FX, multiple exchange rate, high inflation, among others, keep raising the cost of goods produced in the country. When the prices of the locally produced goods are used as bases for determining tariffs to be slapped on food commodities produced in, and imported from countries where the cost of production is lower, the overall duty evaluation of imported food inputs would skyrocket.
‘‘This explains why food inflation is getting out of hand. The National Bureau of Statistics (NBS) revealed in June that the composite food index rose to a staggering 20.60%. The food inflation trend provides a challenge for a larger percentage of the population whose incomes are not keeping up with the pace of inflation.’’
According to the experts, one of the affected food inputs is wheat, a major ingredient in most local staples such as bread, noodles, pasta and semolina, consumed daily in millions of households. The Central Bank of Nigeria (CBN), disclosed that wheat is the third most-consumed grain in Nigeria after maize and rice, with domestic production accounting for only 1% of the 5 to 6 million metric tons of wheat consumed annually.
Experts believe that although the country is taking steps to scale up local production of wheat, it is still far from producing enough to meet the robust demand level for foods derived from the commodity.
A baker, Thomas Chukwu, said that considering the economic importance and role of wheat in the daily food composition of millions of Nigerian households, as well as its importance to local food processing firms, bakers and other businesses allied to the industry, it would be wise, therefore, to lower tariffs at least on essential commodities until the country has built sufficient local capacity in these segments.
‘‘The refusal to lower tariffs on the commodity until the various trials and researches embarked upon by private and public agencies to raise total wheat crop yield begin to pay off is piling woe on the entire value chain, the millions of people whose livelihoods stem from the commodity and consumers. This woe is already becoming evident from the threat by bakers to increase the prices of bread and other baked products by 30%, citing escalating cost of raw material. Premium bread which sold for between N350 and N500 early in the year now goes for N650 and N800,’’he said.(Leadership)