The average cost of preparing a pot of jollof rice for a Nigerian family of five has surged to the highest in almost seven years, according to a new Jollof Index report, reflecting the rising prices of everything from food to fuel in the country.
The report, titled ‘Remaining within a vicious cycle’ by SBM Intelligence, an Africa-focused geopolitical research and strategic communications consulting firm, show that the cost of preparing a pot of the popular Nigerian delicacy rose by 166.3 percent to N10,882 in March 2023 from N4,087 in July 2016, when the index was launched.
A further analysis of the report also shows that a family of five that earns the monthly minimum wage of N30,000 would have to spend 36.3 percent of the pay to cook a pot of jollof.
“Over the last seven years, the Jollof Index has astronomically ascended under President Muhammed Buhari’s administration,” Ikemesit Effiong, head of research at SBM Intelligence, said.
He said food prices have increased largely on the back of the administration’s economic policies. “The index shows a clear view of how much poorer Nigerians have become and how expensive it has gotten to feed a family.”
The report attributed the surge to the impact of various factors, such as fuel scarcity, cash shortages, insecurity, natural disasters, and festive demand, on food prices in Nigeria.
“The analysis reveals that the cost of making a pot of jollof rice is significantly high, placing increased financial pressure on families and potentially reducing their quality of life,” it said.
Using the Jollof Index, SBM illustrates how food prices have changed over time. The data gathered monthly from 13 markets spread across Nigeria’s six geopolitical zones is computed using the costs of the ingredients. It does not include December because of seasonal variations that cause price hikes.
The ingredients that make up the index are rice, groundnut oil, chicken or turkey, beef, seasoning, pepper, tomatoes, salt and onions. While the index has treaded close to food inflation since collection began in 2016, it has provided a simple way of communicating the realities of inflation to the Nigerian public.
The SBM report highlighted that across the 13 markets, Wuse II in Abuja is the most expensive place to make jollof rice at N13,150, while it is the cheapest in Lagos (Trade Fair) at N8,850.
“These differences in the cost of making a pot of jollof rice show the diversity of challenges faced by different communities and the importance of monitoring food prices across various regions to ensure that everyone has access to affordable and nutritious meals,” it said.
Data from the National Bureau of Statistics show that Nigeria’s food inflation rate accelerated for the third straight month in March to 24.46 percent, highest in 17 years, from 24.35 percent in the previous month, according to the National Bureau of Statistics.
One of the interviewees in the SBM report, a 53-year-old trader in Port Harcourt, who sells rice, fufu, garri, and dry fish, said the increase in fuel prices due to fuel scarcity led to higher costs for transporting goods to her shop from village markets.
According to her, the cost of transporting goods from the IBA market in Port Harcourt to Choba within the same city has increased from N1,500 to N3,500. “This additional cost is transferred to the food items she sells, resulting in higher consumer prices,” the report said.
While food prices have been rising in Africa’s biggest economy, other countries are recording a decline as the global food price index dropped for the 12th consecutive month last month, according to the Food and Agriculture Organization of the United Nations.
Analysts at Financial Derivatives Company Limited, led by economist Bismarck Rewane, said in their latest Economic Bulletin report that despite the significant decline in global food and energy prices and the appreciation of the naira at the parallel market, inflation rose again in March.
“This can be largely attributed to inflation expectations and inflation psychology. The latter is driven by uncertainties surrounding demand while the former is driven by seasonalities (planting season),” they said.
Last year, the World Bank said the country’s accelerated inflation growth had eroded the N30,000 minimum wage by 35.5 percent and widened the poverty net with an estimated five million people.
In its latest Nigeria Development Update report, the multilateral lender said the higher inflation in 2022 is estimated to have pushed an additional five million Nigerians into poverty between January and September 2022, mainly through higher prices of local staples – rice, bread, yam, and wheat, especially in non-rural areas.
“Between 2020 and 2022, for instance, the inflation shock has pushed an estimated 15 million Nigerians into poverty.”
It said the minimum wage, which was $82 in 2019, had dropped to $26. “Consumer price inflation had heightened, making it one of the highest in the world.”
SBM recommends that governments and relevant stakeholders must focus on improving agricultural productivity, addressing supply chain inefficiencies, and implementing measures to curb inflation.
“Additionally, addressing the issues of fuel scarcity and transportation costs is essential for stabilising food prices and ensuring the affordability of staple food items, such as Jollof rice, for residents in the affected regions,” it added.
