The Central Bank of Nigeria (CBN) disbursed $689.88 million (₦903.95 billion at the official exchange rate of ₦1,309/$ as of March 31, 2024) to Nigerians for food imports in the first quarter of 2024. This marks a significant increase in food imports, with the value rising by 16.37% in the first six months of the year.
According to data from the National Bureau of Statistics (NBS), the Consumer Price Index for imported food surged from 692.6 points in January 2024 to 806.0 points in June 2024. On a month-on-month basis, imported food inflation reached 36.38% in June, up from 34.83% in May, reflecting a 1.55% increase as the naira weakened following the CBN’s unification of the forex market in June 2023. This unification process aimed at creating a more transparent and efficient foreign exchange market, but it also led to a sharp depreciation of the naira.
Further analysis indicates that imported food inflation has been rising consistently for over four years, driven by a combination of internal and external factors. NBS data from January to June 2024 shows a troubling and steady increase in costs. The imported food inflation rate stood at 26.29% in January, climbing to 29.81% in February, and continuing to rise through March (32.89%), April (34.01%), May (34.83%), and finally reaching 36.38% in June.
Despite the overall upward trend, the rate of increase in inflation showed signs of gradual deceleration from March to May before accelerating again in June.
In response to rising inflation, the Federal Government recently approved a 150-day duty-free window for the importation of maize, husked brown rice, and wheat, aiming to ease the burden on Nigerians. This policy includes the suspension of duties, tariffs, and taxes on these food commodities imported through land and sea borders.
However, the move has drawn criticism. Dr. Akinwunmi Adesina, President of the African Development Bank, expressed concerns, stating that relying on food imports to stabilize prices is a flawed strategy that could undermine Nigeria’s agricultural policy. Similarly, Kabir Ibrahim, National President of the All Farmers Association of Nigeria, warned that duty-free imports could erode the gains made in local maize, rice, and wheat production. He urged the government to invest in the agricultural sector through subsidies on inputs like machinery, fertilizers, and chemicals to ensure a sustainable food system.
Nigeria’s overall inflation rate rose from 33.95% in May 2024 to 34.19% in June 2024, marking an increase of 11.40 percentage points from June 2023. On a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, up from 2.14% in May 2024.
Despite being recognized as the “food basket of Africa,” Nigeria continues to rely heavily on food imports, with the CBN reporting $689.88 million spent on food imports between January and March 2024. This represents a 1.77% increase from the $677.61 million recorded during the same period in the previous year.
The high food import bill remains a significant concern for the government. Despite efforts to boost local production, challenges such as inadequate infrastructure, insecurity, and climate change continue to impede progress in Nigeria’s agricultural sector.
