What's the solution to Nigeria's rising food prices?

The Nigerian economy has been grappling with the persistent issue of rising food prices, with food inflation soaring to 35.4 per cent in January 2024. The government's decision not to implement a price control board or approve food imports has raised questions about the potential solutions to this pressing issue. In a recent interview with CNBC Africa, Oluwaseun Dosunmu, Head of Investment Research at Parthian Securities, shed light on the underlying factors contributing to food inflation and proposed strategies to address the challenges ahead. Dosunmu emphasized the need for a multi-faceted approach to tackle the root causes of inflation and ensure food security for the Nigerian population. Dosunmu highlighted the significant impact of input costs, energy prices, transportation challenges, and security concerns on food inflation in Nigeria. He noted that the high rate of post-harvest losses, estimated at 50 to 70 percent, due to inadequate storage facilities has exacerbated the issue. Comparing Nigeria's storage capacity with that of other countries like South Africa, Kenya, Utopia, and Egypt, Dosunmu underscored the urgent need to enhance storage infrastructure to minimize post-harvest losses. Furthermore, Dosunmu stressed the importance of public-private partnerships to boost food production and distribution. By encouraging private entities to collaborate with farmers, Nigeria can bridge the supply gap and improve market access for agricultural products. Dosunmu also called for government intervention to subsidize input costs for farmers, enhance security measures, and streamline transportation systems to facilitate the movement of produce from farms to markets. Regarding the timing of releasing grains from strategic reserves, Dosunmu cautioned against relying solely on short-term measures to address food inflation. He called for proactive strategies to curb inflation and stabilize the exchange rate. Dosunmu advocated for a comprehensive approach to address the structural issues driving inflation, emphasizing the importance of reducing input costs and enhancing security across the agricultural value chain. In conclusion, Dosunmu emphasized the need for a comprehensive and sustainable approach to tackle Nigeria's rising food prices. By addressing key factors such as input costs, post-harvest losses, and supply chain inefficiencies, Nigeria can mitigate the impact of inflation and ensure food security for its growing population. Dosunmu's insights underscore the importance of proactive government policies, public-private partnerships, and investments in infrastructure to build a resilient and sustainable food system in Nigeria.