Nigeria: Can Buhari bring peace and development through cheap bread?

Kelvin Ayebaefie Emmanuel
By Kelvin Ayebaefie Emmanuel

Co-Founder, CEO at Dairy Hills

Posted on Friday, 21 January 2022 14:02
A woman arranges bread for sale near an auto junk market in Nigeria's commercial capital Lagos, 1 June 2017. REUTERS/Akintunde Akinleye

The greatest threat that Nigeria faces to its stability as a country is not Boko Haram, the Islamic State West Africa Province or the bandits in the north-west and centre; it is food security.

Let’s pick 1917 in Russia, when a group of working moms, who as a result of their frustration with bread queues, formed a band of 100,000 and ignited the first of the country’s two revolutions. Then let’s move to 2010 in North Africa, at the beginning of the Arab Spring that swept through Tunisia, Algeria, Morocco and Egypt. It started as a result of the rising prices of imported wheat and inflation in the price of sugar, milk and bread. The above examples have their roots in the rising price of the most consumed staple around the world: bread.

Bread for the masses

Different regimes in Nigeria have tried to make bread cheaper and more widely available. Then president Goodluck Ebele Jonathan’s government spearheaded the cassava bread initiative under the leadership of the now president of the African Development Bank – Akinwunmi Adesina, who used to be the minister of agriculture – focusing on the production of high-quality cassava flour. Experts say it failed because there was no proper research and development to improve the stickiness and make the dough rise, and that the initiative was not properly coordinated – from the primary production, to the secondary processing and distribution downstream to bakers around the country.

President Muhammadu Buhari’s government, after spearheading an unpopular policy around the ban on importation of rice and import substitution, has given a mandate to the Central Bank of Nigeria to manage a public-private partnership (PPP) programme to produce wheat. The goal is to grow the 5m tonnes of wheat that Nigeria requires yearly, as a means to curtail the estimated 100% inflation in the price of bread in the country.

Pressure on the supply chain

The reason why this move is ever so crucial now is because apart from the drop in the value of the naira by 52% year on year, the disruption in the global supply chain for shipping led to a 300% hike in the cost of shipping goods around the world. This makes it difficult for milling companies in Nigeria to bring in wheat at prices that keep bread at $1 per loaf.

The more Nigerians are able to move away from surviving, the more they can make better decisions around education, build better standards of living and make smarter political choices…

According to the Flour Mills Association of Nigeria, it expects to grow up to 4tn per hectare and gradually transition from its pilot programme in eight states (in North-West and Central Nigeria) to 12 states. If this programme is successful, Nigeria will stop importing wheat – mostly from  Canada and the US – and it also means that costs will be lower for neighbouring countries, such as Ghana and Benin, that import flour from Nigerian millers.

Replacing imports

Backward integration through import substitution comes through the major flour millers that are partners in the PPP (Flour Mills of Nigeria, BUA, Dufil Prima and Crown Flour Mills) consortium programme. They are opting not to import, but rather use the output from their out-grower schemes to replace imports.

This saves on foreign exchange, improves the forward curve for institutional foreign-exchange markets, reduces the deficit in the current-account balance and in turn reduces pressure on the naira.

It is critical that the price of food comes down quickly. The more Nigerians are able to move away from surviving, the more they can make better decisions around education, build better standards of living and make smarter political choices on who they decide to lead them in public offices.

Nigeria’s mediocre politicians have mastered the art of using the quest to survive – as a result of the inflation in food prices and low purchasing power – to negotiate their way to political positions by trading food items to voters during elections. The 2023 elections will be another representation of this grim reality. This government has the chance of leading a legacy and solving this problem permanently. Contributing to food security in Nigeria is key to addressing the war against insurgencies that are predominantly in the north-east and north-west.

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