According to the World Bank Food Security report of June 3, 2024, domestic food price inflation remains high in low- and middle-income countries. The bank said inflation higher than 5 per cent is experienced in 59.1 per cent of low-income countries (2.0 percentage points higher since the last update of the report on April 25, 2024).
By Kayode Adebiyi
Food price inflation is put at 63 per cent for lower-middle-income countries and 31 per cent for upper-middle-income countries.
For some time now, the World Bank has raised concern over rising food prices, especially in low- and middle-income countries.
The bank previously warned that, “High food prices have triggered a global crisis that is driving millions more into extreme poverty, magnifying hunger and malnutrition.”
The bank and other international multilateral institutions believe that the COVID-19 pandemic is responsible for a major setback in global poverty reduction.
They also identify climate change and insecurity as key factors in rising food and energy prices, which is making recovery difficult.
Russia’s invasion of Ukraine, which has disrupted global food supply, has also caused a surge in trade-related policies imposed by countries.
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“The global food crisis has been partially made worse by the growing number of food and fertilizer trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices.
“As of May 28, 2024, 16 countries have implemented 22 food export bans, and 8 have implemented 15 export-limiting measures,” the World Bank said.
In Nigeria, the National Bureau of Statistics (NBS) said Nigeria’s inflation rate rose to 33.95 per cent in May 2024, as prices of food and non-alcoholic beverages continued to surge.
The NBS said food inflation rose to 40.66 per cent in May, compared to the 24.82 per cent reported in the same month last year, indicating an increase of 15.84 percentage points.
The rising cost of food in Nigeria has been made much worse by insecurity and tough economic reforms which saw the removal of subsidy on petroleum.
Exasperated by the situation, angry youths and women took to the streets in some cities to protest the rising cost of living in the country, especially of food commodities.
As part of efforts to address the challenge of food insecurity, the USAID embarked on a five-year West Africa Trade & Investment Hub (Trade Hub) project.
Started in 2019, Trade Hub is a $116-million trade and investment facilitation activity designed to improve private sector productivity, profitability, and competitiveness in West Africa through market-based approaches.
USAID said it went into partnerships with the private sector to foster co-investments through its Co-Investment Fund.
At a trade and investment summit held recently in Abuja, USAID’s Chief of Party, West Africa Trade & Investment Hub, Robin Wheeler, said since the Trade Hub was launched in 2019, its unique model has catalyzed private-sector investments.
“It successfully unlocked $447.8 million in new private investments – surpassing the target of $400 million – and creating 77,710 new jobs in the West African region.
“Using the blended finance approach to engage a grant portfolio of nine private-sector co-investment partnerships funded through USAID/Nigeria, the Trade Hub has achieved remarkable results.
“The Trade Hub has awarded $26.6 million in co-investment grants to 33 private-sector companies in Nigeria, and the grants have sparked $171.2 million in new private investments, generating $399.6 million in sales of agricultural commodities.
“Together, we have created 26,152 jobs in Nigeria, with 7,088 jobs for women and 13,958 for youths,” Wheeler said.
He emphasised the project’s commitment to inclusion and empowerment, highlighted in the involvement of 174,563 women out of 288,043 individuals engaged in co-investment projects across the country.
Ms. Michelle Corzine, Office Director, Economic Growth, Agriculture and Power Office, USAID/Nigeria, noted that Nigeria is currently experiencing an unprecedented food crisis.
She said the food crisis has been exacerbated by multiple internal and external factors, despite the country being blessed with abundant natural resources, a favourable agricultural landscape, and a vibrant population.
Corzine said the US government is deeply invested in the prosperity of Africa because it recognises the immense potential for growth and development of the continent.
“USAID has invested almost $200 million in agriculture over the last five years to improve food security and build household resilience to shocks in Adamawa, Benue, Borno, Cross River, Delta, Ebonyi, Gombe, Kaduna, Kebbi, Niger, and Yobe states.
“During this period, USAID supported over five million farmers with better farming techniques and access to seeds and fertilizer and leveraged over $340 million in private-sector funds to increase production and income,” she said.
Through Trade Hub, USAID has been able to support agribusinesses and smallholder farmers in rice, maize, soybeans, and aquaculture value chains.
It does so by introducing them to modern agricultural technologies and climate-smart practices for enhanced productivity.
It also builds farmers’ and agribusinesses’ capacity by providing training on sustainable land management and disaster risk reduction strategies.
One of the beneficiaries of the project, OCP Fertilizer, was able to build and equip a 200,000-metric-tonne Bulk Blending Plant in Kaduna State with advanced technology from the US.
Mr Oluwatobi Asana, OCP Africa Country Director, whose company got a grant award of over $1.5 million and $2 million in co-investment, said the project helped his company build a fertilizer “centre of excellence”.
Managing Director, Coscharis Farms, Chinedu Okere, said Trade Hub helped in maximising the capacity utilisation of his organisation, having been operating within 50 per cent capacity before the scheme.
As the Trade Hub project winds down, many participants at the summit called for continuity of the partnerships and collaboration it has fostered.
Some of the challenges Trade Hub identified as impediments to food security are not too different from those from the World Bank – insecurity, COVID-19, Russia-Ukraine war, climate change, etc.
However, a lack of adequate investment in agribusiness and economic instability are additional challenges facing the sector in Nigeria.
Stakeholders say for Nigeria to surmount its current food security challenge, the government should be willing to invest in agribusiness by collaborating with the private sector and multinational development partners.
NANFeatures
