Can food price regulation work against fuel hike, Naira depreciation?

Policies and programmes introduced by the Federal Government is one thing that has become the order of the day in each of the governments in this democratic dispensation, but policy implementation is always a bone of contention. The pronouncement by President Bola Tinubu Administration to regulate food price in the market will become another white elephant project that will not see the light of the day. This solely because of lack of adequate preparation and surveys by the government before taking decisions. Fixing and working of our refineries would have been a drastic solution to fuel prices hike but the chameleonic approach in test running the refineries cannot provide immediate effect to the hunger in the land.

Just the way the fuel subsidy removal was done without providing an alternative means to cushion the suffering of Nigerians. The government has failed to understand that there are so many challenges or factors affecting the downturn economy. For instance, the issue of forex regarding Dollar incessant rise against the dollars as a result of high demands on imported Goods must be addressed, fuel Subsidy is still having direct impact on transportation of these foods commodities from the rural to urban settlement, poor workers wages and salaries, insecurity, high rate of unemployment among teeming youths, corruption in the system and general poverty will have a bouncing effect once the government should focus on regulating prices without settling all these factors.

Just last week at a conference in Abuja  on climate change, food systems and resource mobilisation, the Vice President, Kashim Shettima said the NCB would have the authority to “continually assess and regulate food prices, maintaining a strategic food reserve for stabilising prices of crucial grains and other food items.” This is another artificial policy.

But the Tinubu government should be wary of creating another cost centre, which will deepen bureaucracy. Already, the Federal Government has redundant Ministries, Departments and Agencies and is spending 98 per cent of its revenue to service debt.

Indeed, food prices are exorbitantly high these days. The National Bureau of Statistics lists the December food inflation at 33.93 percent, up from the 23.75 percent in December 2022. Reports say the prices of staples like rice, beans, oils, plantain, grains, fish, poultry, and meat have surged by 50 percent. There have been protests in Niger, Osun, Lagos and Kano states against the harsh development.

In bringing relief, the government wants to regulate prices. This is a contradiction in part because the Tinubu government professes to be laissez-faire in outlook. The President demonstrated this during his inauguration last May when he allowed market forces to determine the cost of petrol. This has a huge impact on transportation, and on the prices of food.

The following month, with his prompting, the Central Bank of Nigeria merged the multiple rates of the naira. From N460.70 per $1 then, the naira is exchanging for around N1,600/$ currently is worrisome.

Since those twin policies, prices have taken on a life of their own. But what’s sauce for the goose is sauce for the gander: if Tinubu abolishes the regulation of the petrol  prices because he subscribed to economic reforms he can’t turn around to fix food prices in the market.

Other causes are insecurity, shabby road infrastructure, advancing desertification, climate change, crop diseases, ‘nuisance taxes,’ rudimentary farming system and poor political will.

Without firmly addressing these factors, the prices of food are not likely to diminish.

Rather than trigger another round of confusion in the system by fixing food prices, the Tinubu administration should try other means. According to the CBN, Nigeria’s annual food import bill is $15 billion. With the depreciation of the naira, the impact of this is devastating on food prices. So, the government should rebuild the value of the naira.

Through domestic refining, there should be genuine efforts to reduce the prices of diesel and petrol, the major fuels for transportation. If the cost of transportation reduces, food prices will contract.

ActionAid Nigeria says Nigeria suffers 50 percent post-harvest losses, amounting to N3.5 trillion annually. The federal, state and local governments should build storage facilities to accommodate the excess foods during harvest. Perishable items like tomatoes and fruits should be processed to keep them edible.

But all these plans will falter without significantly improving the security system. This has nearly destroyed food production in Nigeria in which agriculture, at 21.01 per cent in 2023, is the largest contributor to the GDP. In many states, farmers have abandoned their farms. So, Tinubu must stop paying lip service to state police to reduce the security breaches.

State governments should prioritise the construction of rural roads to ease the transportation of farm produce to the urban centres.

The recent clampdown of some business entities, malls in Abuja by the Federal Consumer Protection Commission (FCCPC)  with the notion that they are selling above the stipulated prices and extorting customers will not hold water because the government should address the foundation of the problems that has brought us to this stage not peripheral approach to draw media attention.

It is important that the president as a matter of urgency deploy means of reducing the level of hardship on the citizens before it’s too late. The mass protest that kicked off in Niger state, Kogi, Kano, and two days ago in Oyo state, in the name of high cost living, hunger impediment will lead insecurity should the government fail to find lasting measures to the problem.