Bread Palaver- Thoughts on Self Sufficiency in Nigeria
Nigerians love Bread. In the South East where I originally am from, it’s almost become tradition to take “home” loaves of bread. It’s part of our Saturday morning breakfast routine, eaten with akara (fried beancakes), sandwiches, hawked with margarine, it really is part of us. Glorious bread which before our very eyes is becoming even more expensive everyday. We (Nigerians) do not produce enough wheat and now two of the world’s biggest producers of wheat, are fighting each other. With domestic production low and limited access to imports, Nigerian bakers are forced to hike up the price of beloved Bread (and other pastries) while the consumer feels the heat.
What is the solution? Higher flour costs will mean that some families may have to remove this beloved staple from their diet. Nigeria is experiencing high inflation with many feeling the crunch as the country grapples food insecurity, high inflation and a weakening currency. How do we make the bakers happy again? Happy enough to step down the prices of flour/wheat based products? I think its tied to two options; either put in place measures to ramp up domestic production or find a substitute to wheat. One that is home grown.
I’d liken the second option to autarky i.e. the idea of economic independence, self sufficiency. I first heard of this phrase when learning about Benito Mussolini, Italy’s former fascist leader who introduced a series of really complex measures as part of his agricultural policy. One of these was the Battle for Grain, which very interestingly was all about WHEAT; Mussolini sought to increase domestic production of wheat to make Italy completely self sufficient, and I do note that although domestic production of other crops at the time declined, successes were recorded in wheat production. However, the production of famous Italian staples e.g. wine, cheese, fruits and other dairy declined (affecting exports).
In many ways I perceive the current Nigerian Government’s agricultural policies to be very autarky (protectionist) inspired. The Federal Government recently “banned” foreigners from purchasing agricultural commodities directly from farmers, closed its borders to food imports (in 2019), and also created credit schemes for Nigerian farmers e.g. the anchor borrowers program. On a personal note, I am not pro protectionist policies (Free Market Defender over here) however, the truth is that in order to grow its domestic potential, every economy will have some protectionist policies. That notwithstanding, the free market provides choice, brings down prices and also (in my opinion) improves quality and standards.
The Anchor Borrowers Program was launched by President Muhammadu Buhari in 2015 primarily aimed at boosting agricultural production. Loans were to be disbursed to beneficiary small scale farmers through financial institutions and on harvest, the farmers were expected to pay back loans by taking these harvested crops to anchors who deposited the cash equivalent to the farmers accounts with the financial institutions. To quote directly from the Central Bank of Nigeria (CBN) Guidelines, “The produce to be delivered must cover the loan principal and interest”. On the face of it, it sounds like a simple plan which would benefit the farmer and ramp up the country’s domestic production however the results are not uniform across the country. In essence, it has been a win for some but on the other hand has room for significant improvement especially per loan defaults and accessibility.
The Closure of the Borders is another policy which on the very face of it is protectionist. Has it been successful? Did we end up with more food and conserve our precious $$$? In its January 2020 report, the Centre for the Study of Economics in Africa (CSEA) reported that inflation has been on the rise in Nigeria since the closure of Nigeria’s borders in August 2019. Quoting directly-
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“The latest consumer price index (CPI) report released by the National Bureau of Statistics (NBS) in November 2019 proved that the year-on-year food inflation rate increased from 13.2% in August 2019 to 13.51% in September 2019 and then from 13.51% in September 2019 to 14.09% in October 2019. This was a 1.33% month-on-month increase — with rice, poultry products, frozen fish, cooking oil/fats and bread/cereals recording the highest increase in cost prices nationally. A huge contrast with regards to decelerating food inflation rates usually recorded during a harvest season.”.
Nigeria does not grow enough food for her population and challenges with the country’s infrastructure affects the movement of local produce within the country itself. Closing the borders thus limits closer access to foodstuff from neighboring countries which again reduces supply (availability), in turn leading to a hike in food prices. As of the very moment I am writing this, the prices are still rising. Even more interesting is the fact that the borders were closed less than 5 months after the country celebrated signing the African Continental Free Trade Area (AfCFTA) Agreement which was meant to boost intra-Africa trade. By signing the Agreement, the country together with other members committed to disciplining intra-African trade in goods and prescribing rules on customs cooperation and mutual administrative assistance, trade facilitation, transit and transit facilitation, and non-tariff barriers etc. To have been a fly on the wall in the African Union when Nigeria closed its borders would be something. You see the beautiful thing about the AfCTA is access; access when the commodity is scarce in your region in essence, and where this access is guaranteed, prices are indirectly controlled through choice/competition effectively guarding against food insecurity. Thankfully, the President eventually ordered the re-opening of some land borders.
Protectionism or self sufficiency is on the face of it is not completely bad; domestic stakeholders feel some sort of comfort as their goods are the only option. It allows them maintain some level of control however the consumer suffers as standards, price and choice are all at risk. The free market on the other hand benefits the customer who can select what he or she wants and has more bargaining power due to the availability of other options.
As for this bread issue, Nigeria really has been on it for a while. Under the administration of former President Goodluck Jonathan, cassava was often touted as an alternative base product of bread however, this quote from Nouru Salisu to The Guardian explains Nigeria’s reaction to Cassava Bread
“Nobody will chop [eat] cassava bread. The cassava starch will not allow the bread be soft,” he said, when told of policies that will compel bakeries to begin substituting wheat flour for cassava flour….”We don’t have the science [technology] to grind the cassava, to make the bread soft. Our customers will not buy it and it will spoil,”
The bread palaver is a conundrum for which time will only tell the solution. However one thing I am certain of is this, protectionism will not get us out of this one.
Thankfully, I am not big on bread
