Thursday, October 08, 2020 / 2:12 PM / By FDC Ltd / Header Image Credit: FDC Limited
In August 2019, President Buhari directed the CBN to ban food importers from accessing forex from the official market. This was coming at a time when external reserves was approximately $43.61bn. Twelve months later, President Buhari has again reiterated his disapproval of forex access to finished food and fertilizer importers. Following the crash in Brent price and the sharp drop in revenue, the Federal Government is seeking to ration the country's gross external reserves (which is currently below $40bn).
On the heels of the policy pronouncement and the flood crisis in Kebbi state, reports by Bloomberg and Reuters expressed concerns about the possibility of a food crisis in Nigeria.8 The rise in food prices amidst unfavorable weather conditions, currency adjustment, hike in PMS price etc. has resulted in a discourse about the idea of food security in the Nigerian context. Sadly, food security, its measurement as well as the different components remain ambiguous to Nigerian consumers, investors and other key stakeholders.
Food security: what is it and how is it measured?
Over the years, the concept of food security has been given different definitions by different international agencies. A common definition is that "all people at all times have physical, social and economic access to sufficient, safe, and nutritious food that meets their food preferences and dietary needs for an active and healthy life". The four components of food security are:
Availability: measures the easy disposal of food items to citizens through the sufficiency of road, rail, and air transport infrastructure.
Access: focuses on household incomes, expenditure and price levels in attaining food security.
Utilization: highlights the nutritional implications of food intake by individuals. For instance, meat consumption in Nigeria is a meagre 9kg per person compared to Middle East and Africa's average of 30.4kg per person.
Stability: This dimension of food security seeks to guarantee that there is a synchronization of all dimensions in order to guarantee a country's food security.
Is Nigeria Food Secure?
The Global Food Security Index confirms the fragile state of Nigeria's food security as the country ranks 94 out of 113 countries. The index has three components - Affordability, Availability and Quality & Safety - all of which Nigeria ranks and scores poorly. A breakdown of Nigeria's score and rank in the three sub-indices is below:
Nigeria's journey to food security: The role of food safety net programs
On the journey to food security, research shows that there is no one size fits all approach. The 2007/2008 global food price crisis, which was due to droughts in grain-producing countries, saw different countries adopt varying responses. Whilst Asian countries such as China, Indonesia adopted the suspension/reduction of VAT and other taxes, African countries such as Kenya, Liberia and Nigeria chose to reduce tariffs and custom fees on imports. This shows that a unique response to food security challenges depend on the development needs, social objectives and fiscal capacities of a country.
For Nigeria, a potential option to tackling food insecurity is the use of food safety net programs. Food safety net programs are simply cash or in-kind transfers targeted at the poor and vulnerable. A good example for Nigeria to emulate in introducing efficient and effective food safety net programs is Ethiopia.
Lessons from the Ethiopian Model
In 2005, the government of Ethiopia launched the Productive Safety Net Program (PSNP) as a way of assuring food consumption and providing relief to vulnerable households. Broken down into four stages, the program has so far reached over 8million citizens across four major regions in Ethiopia. The program is funded through a collaborative effort between the Ethiopian government and multilateral agencies such as the Department for International Development (DFID). The lesson for Nigeria lies in how Ethiopia was able to deliver on the promise of ensuring food security and how vulnerable households were identified. The key take-aways for Nigeria include:
There is a need for the Nigerian government to pay more attention to food security challenges in the country. Addressing the access, affordability and nutritional aspects of food security would involve a deliberate effort by policymakers to set aside contingency funds and engage key stakeholders. The Ethiopian model offers several learning points for Nigeria to emulate, as this would aid food consumption and reduce the national poverty level.