Upon global assessment, BCG says Nigeria is at “high risk” of food insecurity
NEWS DIGEST – Nigeria is one of 45 countries that could suffer severe food insecurity consequent of the Ukraine-Russia war on global food systems, according to the Boston Consulting Group.
“Together, Russia and Ukraine supply about 12% of the total food calories traded around the world, and both are critical exporters of key commodities such as wheat (28% of global trade) and sunflower oil (69%),” BCG said in its report, The War in Ukraine and the Rush to Feed the World.
Nigeria has already seen its consumer price index increase for the third successive month this year depicting a continuous surge in the price of consumer goods, and a reflection of how much the demand for such products outweighs the supply.
The World Bank estimates that food prices will increase further by 23% this year, despite a 31% increase last year. Much of this increase will be dictated by an increase in the cost of raw materials, fuel for production and transportation cost.
In May, Nigeria needed to buy emergency stashes of potash, useful in producing fertilizers, from Canada because a trade embargo on Russia had restricted the country from purchasing from Russia’s Uralkali, its exclusive supplier since 2019.
Despite the federal government’s best effort to suspend the removal of subsidies on fuel, the cost incurred from using fuel for production continues to be a burden to many food manufacturing industries, and one that is now reflected in the high cost of food items.
“The result: immediate distress and the likelihood of reduced farm yields for as long as the next four years,” said BCG.
About 1.7 billion persons, most of whom are in developing countries, could now become affected by higher energy prices and greater debt burdens, says the UN Task Team for the Global Crisis Response Group.
Countries which are expected to see the worst of this food crisis are concentrated in Africa, South Asia and Latin America. Coincidentally, these regions are those with economies worst hit by the Covid-19 pandemic.
Stefano Niavas, Managing Director, BCG Nigeria, has urged the Nigerian government to actively pursue stabilising the rising cost of food and fertilizers and drive the adoption of innovative farm practices to help reduce the country’s reliance on food imports moving forward.
“The impact of the Ukraine war on our food systems calls for critical and immediate review of our budgetary allocation,” he said. “Currently, Nigeria spends over 27 times of its Agriculture allocation to service its debt.”
Because the Ukraine war has shown little sign of settling, BCG employs “High risk” Nigeria and other concerned countries to develop in-country production solutions that guarantee the medium-term survival of its citizens, especially its most vulnerable population.