Nigeria’s reliance on imported food continues to be a significant economic concern, as evidenced by the Central Bank of Nigeria’s (CBN) allocation of $1.87 billion for food imports in the first nine months of 2024. This figure represents a substantial 14.37% increase compared to the $1.64 billion allocated during the same period in 2023, and highlights the country’s struggle to achieve food security through domestic production. This growing dependence on foreign food sources has implications for Nigeria’s trade balance, currency stability, and overall economic vulnerability.
A closer examination of the CBN data reveals a fluctuating trend in monthly forex allocations for food imports throughout 2024. While January saw a significant drop compared to the previous year, February experienced a near doubling of allocations. This volatility continued throughout the first half of the year, with declines in March, April, and May, followed by a marginal dip in June. The second half of the review period, however, presented a different picture, with July, August, and September witnessing substantial increases in allocations compared to their 2023 counterparts. This suggests potential seasonal factors influencing import needs, as well as possible responses to domestic market conditions and policy changes.
The monthly variations in 2024 also paint a complex picture. A sharp rise in allocations from January to February was followed by a decline in March and a further drop in April. May witnessed a recovery, followed by stability in June. July saw a significant decrease, which was then countered by a substantial rebound in August, only to decline again in September. These fluctuations reflect the dynamic interplay of various factors influencing food import demand, including domestic production levels, pricing fluctuations, logistical challenges, and government policies.
This volatility in forex allocations underscores the challenges in managing food security within Nigeria. The reliance on imports, despite efforts to stimulate local production, suggests systemic issues hindering domestic agricultural development. Factors such as inadequate infrastructure, limited access to finance for farmers, post-harvest losses, and insecurity in food-producing regions likely contribute to the continued dependence on imported food. Moreover, the unpredictable nature of global food markets and exchange rate fluctuations further complicates the situation, making it difficult to maintain a stable and affordable food supply.
The consequences of this dependence are evident in the stubbornly high food inflation rates. According to the National Bureau of Statistics, Nigeria’s year-on-year food inflation reached a concerning 39.84% in December 2024, a significant increase from 33.93% in December 2023. This persistent rise in food prices places a significant burden on Nigerian households, impacting their purchasing power and potentially exacerbating food insecurity, especially for vulnerable populations. While a slight month-on-month easing was observed in December, attributed to price reductions in certain items, the overall trend remains decidedly inflationary. Regional differences in inflation rates further highlight the complex interplay of local factors influencing food prices.
The government’s attempts to mitigate the situation through a 150-day duty waiver on imported food commodities, announced in July 2024, have faced bureaucratic delays, hindering their effectiveness. This delay underscores the challenges in translating policy intentions into concrete action and highlights the need for streamlined processes and effective implementation strategies to address the pressing issue of food inflation. The intended introduction of Recommended Retail Prices for these imported commodities, aimed at controlling market prices and ensuring affordability, further complicates the implementation process and raises questions about its feasibility and potential impact. The ongoing reliance on imports, coupled with bureaucratic hurdles in implementing mitigating measures, paints a concerning picture for Nigeria’s food security landscape.
