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Insecurity threatens food security in Kaduna, Katsina, Yobe, others — W’ Bank warns



…Says food inflation remains a concern for low, middle, high-income nations

By Sodiq Adelakun

The World Bank has projected that seven states in Nigeria’s North-west and North-east regions are on the brink of a food security crisis by 2024.

The states facing this dire situation include Borno, Adamawa, Kaduna, Katsina, Yobe, Sokoto, and Zamfara.

The report attributes the impending crisis to ongoing insecurity and armed conflicts, which have significantly deteriorated living standards in these areas.

The World Bank’s latest Food Security report paints a grim picture, indicating that the persistent unrest in these regions is severely impacting agricultural activities, leading to reduced food production and heightened risk of famine.

The situation is exacerbated by the displacement of communities, which further undermines the ability to cultivate land and secure food supplies.

While the focus is on Nigeria, the report also casts a spotlight on the broader West African region, with countries like Burkina Faso, Chad, and Niger also expected to face varying levels of food insecurity.

As international and local authorities grapple with these challenges, the World Bank’s projections underscore the urgent need for concerted efforts to prevent a full-blown food crisis in one of Africa’s most populous nations and its neighbors.

It stated, “It is projected that most areas in West and Central Africa will remain Minimally food insecure (IPC Phase 1) until May 2024, with some being categorized as Stressed IPC 2. Nigeria (far north of Adamawa, Borno, Kaduna, Katsina, Sokoto, Yobe, Zamfara states) will be at Crisis food security levels (IPC Phase 3), mostly because of persistent insecurity and armed conflict and deteriorating livelihoods.”

It further stated that areas in Northeastern states such Abadam, Bama, Guzamala, Marte etc will experience Emergency food security levels (IPC Phase 4) as a result of limited household food stock and access to market and humanitarian aid.

The report also noted that over 63.2 percent of low-income countries experienced inflation levels surpassing 5 percent, marking a 1.3 percent-point increase compared to the previous food update on January 17, 2023.

In lower-middle-income countries, 73.9 percent saw inflation levels exceeding 5 percent, while 48 percent of upper-middle-income countries maintained similar percentages as the last update, with no changes recorded.

The World Bank noted that in high-income countries, over 44.4 percent reported food inflation levels surpassing 5 percent, marking a 1.9 percent decrease compared to the previous food update.

Additionally, the report revealed that in real terms, food price inflation outpaced overall inflation in 71 percent of the 165 countries where data was available.

The report further highlights the precarious situation many states in Nigeria find themselves as food prices scale the roofs. The latest CPI report from the National Bureau of Statistics (NBS) puts food inflation at over 33 percent.

In October, the Food and Agricultural Organisation (FAO) warned that around 5 million Nigerians are at risk of hunger in 2024.

The United Nations (UN) reported in its Africa Regional Overview of Food Security and Nutrition that since the onset of the 2020 COVID-19 pandemic, approximately 78 percent of Africans have been unable to afford a nutritious diet.

In July, President Tinubu declared an emergency on food insecurity in the country and moved the item to the National Security Council. However, the move has resulted in little or no impact as food prices continue to surge.

Yesterday, protests broke out in Niger state over rising food prices and hunger across the state.

…Says food inflation remains a concern for low, middle, high-income nations

In a related development, according to the latest Food Security Update report from the World Bank, released on Tuesday, global food prices continue to experience high inflation across low, middle, and high-income countries.

The report reveals that in 63.2 percent of low-income nations, inflation exceeded 5 percent, representing a 1.3 percentage point increase from the previous update in January 2023.

Similarly, 73.9 percent of lower-middle-income countries and 48 percent of upper-middle-income countries also witnessed inflation levels surpassing 5 percent, with no change from the previous update.

In high-income countries, the World Bank observed that 44.4 percent of nations experienced food inflation above 5 percent, indicating a decrease of 1.9 percentage points from the previous update.

Furthermore, the report emphasised that in 71 percent of the 165 countries with available data, food price inflation outpaced overall inflation in real terms.

The World Bank’s Food Security Update also highlighted the impact of recent attacks by Houthi rebels on vessels in the Red Sea.

These assaults have resulted in a 40 percent reduction in trade volumes through the Suez Canal, thereby diminishing global food security, as reported by the International Food Policy Research Institute (IFPRI).

In 2023, food prices, mainly in the agricultural price index, fell by 9 percent due to ample supplies of major crops, except for rice, which declined by 27 percent.

Forecasts indicate further price declines in 2024 and 2025, although risks like energy cost hikes, adverse weather, trade constraints, and geopolitical uncertainty could intervene.

In 2023, the price of food, particularly in the agricultural sector, dropped by 9 percent due to an abundance of major crops, with the exception of rice, which experienced a decline of 27 percent.

Forecasts suggest that food prices will continue to decrease in 2024 and 2025, although there are potential risks such as increased energy costs, adverse weather conditions, trade limitations, and geopolitical uncertainty that could impact these projections.

The World Bank Group has significantly increased its efforts by allocating $45 billion, including $22 billion in new loans and $23 billion from existing portfolios.

These initiatives now cover 90 countries and aim to address both short-term needs, such as expanding social protection, and long-term goals, such as improving productivity and implementing climate-smart agriculture.

The World Bank has stated that its intervention is expected to have a positive impact on 335 million individuals, which is equivalent to 44 percent of the undernourished population. Approximately 53 percent of the beneficiaries are women, who are disproportionately affected by the crisis.

One of the World Bank’s interventions, the West Africa Food Systems Resilience Programme, has a budget of $766 million and aims to enhance preparedness against food insecurity while strengthening the resilience of food systems in the region. Additionally, the bank is preparing to commit an additional $345 million for Senegal, Sierra Leone, and Togo.

Money market

FG urges NIPSS members on creative solutions to national challenge



The Minister of Budget and Economic Planning, Atiku Bagudu, has urged members of the National Institute for Policy and Strategic Studies (NIPSS), to devise creative solutions to Nigeria’s social and economic challenges.

Bagudu received  participants of the Senior Executive Course 46 of the institute in his office on Monday in Abuja.

According to him, some of the issues confronting Nigeria  as a nation might require out of the box solutions.

“The NIPSS was created in the wisdom of our forefathers, to train senior management personnel that can bring unusual solutions to problems confronting us,” he said.

He urged the participants to eschew self-interest and make decisions that can assist the nation to make better choices.

Bagudu  said that the national planning function of the ministry comes from the National Planning Commission.

He said that the digital economy is one area that the ministry was looking at for mass youth engagement and economic prosperity.

“Digital economy is an evolving process.which the country will have to leverage digital for overall growth and development.

“It is a new reality. Today trading platforms are closing shop and increasingly going digital.

“Nigeria needs to respond positively and reap benefits from the digital economy. But we have to make the space safe through effective regulation.

“Some countries have data protection laws which enable them to check and regulate excesses in the digital space,” he said.

The Minister commended the law enforcement agencies for promptly going after digital platforms like Binance, which was used to disrupt the foreign exchange market and to weaken the Naira.

He also commended the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, for his various monetary policy decisions that restored confidence in the Nigerian economy.

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Money market

Cardoso to speaks at IMF meeting on FX reforms



The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso will speak on foreign exchange (FX) market reforms at the ongoing International Monetary Fund (IMF) Spring Meetings on Wednesday in Washington D.C.

The meetings of the Boards of Governors of the IMF and the World Bank Group (WBG) bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organisations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system

Cardoso assumed office as the Governor of the CBN in September 2023. Since then he has introduced some new FX policies and adjusted some existing ones to ensure the stability of the naira.

According to Cardoso, the exchange rate in Nigeria has increased/depreciated due to the simultaneous occurrence of two factors: a decline in the supply of US Dollars coinciding with a surge in the demand for US dollars.

He said in February 2023 that the foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

To address exchange rate volatility, he said a comprehensive strategy has been initiated to enhance liquidity in the FX markets.

This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs, enforcing the Net Open Position limit, and adjusting the remunerable Standing Deposit Facility cap.

As part of measures to control inflation and stabilise the naira, the CBN last month raised its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 200 basis points to 24.75 percent from 22.75 percent in February 2024.

In her second term message, Kristalina Georgieva, IMF managing director, who was recently reappointed by the executive board of the IMF, said, “I am deeply grateful for the trust and support of the Fund’s Executive Board, representing our 190 members, and honoured to continue to lead the IMF as managing director for a second five-year term.”

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Money market

PenCom recovers N12.45bn from erring employers



The National Pension Commission (PenCom) said it has recovered N12.45 billion from employers that failed to contribute towards their employees retirement.

The recovery would indeed help in wealth creation for the workers, thereby securing them against old age poverty in retirement.

PenCom in its 4th quarter 2024 report, said it has maintained the services of Recovery Agents (RAs) for the recovery of unremitted pension contributions and penalties from defaulting employers.

It submitted that during the quarter, the sum of N319,468,587.45 comprising principal contributions N128,176,029.95 and penalties N191,292,557.50 was recovered from 32 defaulting employers.

It noted that meanwhile, the Commission Secretariat/Legal Advisory Services Department had been requested to take legal action against 4 defaulting employers.

The pension industry regulator maintained that from the commencement of the recovery exercise in June 2012 to 31 December 2023, a total sum of N25,447,085,186.71 comprising of principal contributions N12,929,415,445.52 and penalties N12,517,669,741.19 was recovered from defaulting employers.

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