How rising costs, wheat imports, triggered Nigeria’s bread crisis

2022-08-01 10:57:02
How rising costs, wheat imports, triggered Nigeria’s bread crisis

Available data has shown that Nigeria imported about 99 percent of its wheat requirement in the first quarter of 2022 (Q1’22), and with the attendant foreign exchange (forex) demand pressure, this has been fingered as one of the major factors responsible for the ongoing bread crisis in Nigeria.

Financial Vanguard findings also show that bakers and other confectionary industry operators have marked up their product prices about four times this year.

As at last week the series of price mark ups have seen the average retail price of bread go up by as much as 50 percent this year.

The Federal Ministry of Agriculture and Rural Development estimated Nigeria’s national wheat requirement at 5 million metric tons, and the National Bureau of Statistics (NBS) reported that the country produced only 36,943 metric tons of wheat in 2021, representing less than one percent of the country’s total annual demand.

According to NBS, wheat was Nigeria’s second most imported goods in Q1’22, accounting for N258.3 billion of the value of total imports in the period.

A 50kg bag of flour now goes for about N30,000 as against N12,600 in January 2021, representing an increase of 138 percent.

Recall that bakers had embarked on a withdrawal of services for four days last week, in a move to draw attention to the crises and ensure the survival of the bread industry in Nigeria.

According to the National Secretary of the Association of Master Bakers and Caterers of Nigeria, Jude Okafor, high production cost forced the bakers to close shop.

In a chat with Financial Vanguard, President, Premium Breadmakers Association of Nigeria (PBAN), Engr Emmanuel Onuorah, lamented the huge differential between import and in-country growing in the nation’s wheat requirement, noting that the foreign exchange (forex) needed to fill the gap through importation is much, in addition to other factors aggravating the cost of producing bread in Nigeria.

He lamented that the escalating cost of production has pushed down the capacity utilisation of an average bakery in Nigeria.

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