Cost of jollof surges 34% in one year

The typical price of getting ready a pot of jollof rice for a Nigerian household of 5 has risen by 34.2 % in a single 12 months, based on a brand new Jollof Index report.

The report, titled ‘Hungry for Change’ by SBM Intelligence, an Africa-focused geopolitical analysis and strategic communications consulting agency, exhibits that the price of getting ready a pot of the favored Nigerian delicacy rose to N12,373 in June 2023 from N9,220 in the identical interval of final 12 months.

Which means that a household of 5 that earns the month-to-month minimal wage of N30,000 must spend 41.2 % of the pay to cook dinner a pot of jollof.

An additional evaluation exhibits that it elevated by 202.8 % from N4,087 in July 2016, when the index was launched and rose inside a interval of 4 months (March-June) by 13.7 %.

“The worth improve in April and early Might may very well be linked to the lingering penalties of final 12 months’s floods which dealt a deadly blow to the late harvest and the naira redesign coverage,” the report mentioned.

It mentioned the worth was additionally influenced by the seasonal fluctuations of sure meals objects however that, nonetheless, in direction of the top of Might and into June, the typical price was affected to various levels by two essential coverage selections.

“These are the top of the nation’s petrol subsidies and the devaluation of the native forex, the naira, to unify the trade fee and try and take away arbitrage within the system. The subsidy removing elevated gasoline costs and elevated meals and transportation prices throughout West Africa over the past two months,” it added.

In line with Israel Odubola, a Lagos- based mostly analysis economist, the increment displays the inflationary pressures the nation is experiencing at the moment.

“It exhibits elevated monetary stress for low and middle-income households. They might now must allocate extra monetary sources for meals and different primary wants, that means fewer funds for financial savings and investments,” he mentioned.

Utilizing the Jollof Index, SBM illustrates how meals costs have modified over time. The information gathered month-to-month from 13 markets unfold throughout Nigeria’s six geopolitical zones is computed utilizing the prices of the components. It doesn’t embrace December due to seasonal differences that trigger value hikes.

The components that make up the index are rice, groundnut oil, hen or turkey, beef, seasoning, pepper, tomatoes, salt and onions. Whereas the index has treaded near meals inflation since assortment started in 2016, it has supplied a easy method of speaking the realities of inflation to the Nigerian public.

The report additionally revealed that month on month, costs elevated by 4.7 % between March and April, 2.8 % between April and Might and 5.6 % between Might and June.

“Protein sources are essentially the most affected. One in all our interviewees famous that her household had lengthy migrated from turkey to hen, then to beef, innards and now principally ponmo (cow pores and skin) and eggs. However these alternate options are additionally getting costlier,” authors of the report mentioned.

They added that aside from jollof rice, the price of recent tomatoes used for making one other broadly consumed staple throughout the nation corresponding to rice and stew has recorded a notable improve.

“From promoting a custard pail of tomatoes for N1,500 as of January this 12 months, the associated fee has elevated to N6,000 on the time of the survey, particularly in city markets. Farmers complain of the poor yields attributable to floods late final 12 months,” they mentioned.

The SBM report highlighted that throughout the 13 markets, Wuse II in Abuja is the most costly place to make jollof rice at N16,230, whereas it’s the most cost-effective in Onitsha, Anambra at N10,050.

Within the fourth quarter of final 12 months, flood incidents within the nation destroyed 70,566 hectares of farmland, broken 45,249 homes and displaced over 1.4 million Nigerians, with about 600 individuals reported useless.

The floods affected the volumes of paddy rice, which is placing stress on the worth. As at Might, the worth of a ton of paddy was over N300,000, David Ibidapo, companion and head of company technique at Investapool Restricted, mentioned.

“There’s a want to begin rethinking the methods round guaranteeing that we domesticate our paddy rice within the dry season. So the federal government wants to consider methods of driving investments into irrigation farming as a result of it’s costly for farmers,” he mentioned.

In line with Ibidapo, cost-effective choices like solar-generated energy for irrigations must be thought-about, pending the time the nation rebuilds the refineries that may be provided at a less expensive fee.

President Bola Tinubu in Might introduced the removing of the petrol subsidy upon his inauguration into workplace. Barely three hours after the speech, petrol costs throughout the nation surged by a median of 174.6 % from two months in the past.

Petrol in Africa’s largest financial system was promoting at a median of N526.7 per litre from a median of N191.8 per litre a month in the past, based on BusinessDay’s calculation of NNPC’s new/previous value checklist.

Final week, Nigerians noticed a second hike in petrol costs because the Nigerian Nationwide Petroleum Firm Restricted (NNPC) elevated the pump value at its stations in Abuja to N617 and different entrepreneurs throughout the nation additionally adjusted their costs. In Lagos, Mobil station alongside the Lagos-Ibadan Expressway was promoting the product at N568.

Learn additionally: Gasoline Subsidy Removing: Kwara govt approves 500m fund for merchants

In June, the Central Financial institution of Nigeria abolished segments of the official international trade market to the Traders & Exporters Window, the place the “keen purchaser and keen vendor” was re-introduced. Primarily based on this adjustment, the official fee rose from N463.38/$ to N830 as eventually Wednesday.

Nigeria’s meals inflation fee accelerated for the six straight month in June to 25.25 %, highest in 17 years, from 24.82 % within the earlier month, based on the Nationwide Bureau of Statistics.

The most recent Nigeria Improvement Replace report by the World Financial institution mentioned the lack of buying energy from excessive inflation has pushed an extra 4 million individuals into poverty within the first 5 months of 2023.

“Common costs of regionally produced staples have elevated quicker than common inflation. The lack of buying energy elevated the poverty headcount fee by an estimated two share factors or 4 million individuals,” it mentioned.

The financial institution added that within the speedy time period, the removing of the petrol subsidy has precipitated a rise in costs, adversely affecting poor and economically insecure Nigerian households.

“The poor and economically insecure households will face an equal earnings lack of N5, 700 per thirty days, and with out compensation, an extra 7.1 million individuals will probably be pushed into poverty.”

Meals costs in Nigeria are much more difficult as a result of the petrol subsidy removing and naira devaluation created financial pressures that have an effect on lower-income households essentially the most and make meals safety worse, based on SBM.

“Whereas it is a big concern, there’s something deeper to fret about. Meals insecurity can result in socio-economic instability, compelled migration, social unrest and extreme burden on world sources and infrastructure,” it mentioned.

It recommends that it’s essential to recognise this looming disaster and act swiftly to scale back its affect with regional, nationwide and world governments collaborating to deal with the underlying components driving escalating meals costs.

The measures recognized are selling sustainable agricultural practices, enhancing transportation infrastructure, revisiting import insurance policies and strengthening native economies.