Janet Ogundepo
A new report has shown that weak competition contributes to unfair food prices in Nigeria.
The report emanated from a study conducted by Consumers International using a tool called Fair Food Price Monitor.
It revealed that aside from the rise in the prices of fuel and the depreciation of the naira, retail prices of food rose significantly faster than wholesale prices.
According to the National Bureau of Statistics, the food inflation rate in November 2023 rose to 32.84 per cent, while the annual inflation rate rose to 28.20 per cent from 27.33 per cent in October 2023.
The report partly stated, “In a fair food system, value should be distributed equitably throughout the supply chain. All those involved in food production and distribution should make a decent livelihood; while consumers should not have to pay an excessive price to access their fundamental right to food.
“Yet our food systems – both global and national – are facing a crisis of unfair prices. Growing market concentration is enabling a small number of actors to make record profits, off the backs of overcharged consumers and underpaid farmers and workers. This is a reality highlighted by the United Nations Conference on Trade and Development, World Trade Organisation, and many more – yet governments remain slow to act on the threat of unfair prices.”
The report added that dominant market actors took advantage of the fuel and naira crisis to excessively increase prices.
Using data from the National Bureau of Statistics and Famine Early Warning Systems Network, the study tracked the relationship between food prices at different stages of the supply chain in Nigeria.
Key findings from the study also showed that retail and consumer prices have risen substantially faster than wholesale and market prices.
“Between January 2022 and August 2023, the retail price of yams increased by 74 per cent, while the wholesale price rose by just 60.3 per cent. In the same period, the retail price of groundnut oil increased by 56.3 per cent, while the wholesale price of groundnuts rose by only 35.3 per cent. The retail price of maize increased by 19.2 per cent throughout 2022, while wholesale prices fell by 4.1 per cent,” it further stated
The Fair Food Price Monitor pointed out that although the rise in fuel price and depreciating naira value accounted for the general increase in both retail and wholesale prices of food, “they do not appear to be sufficient explanation for the excessive rise in retail prices.”
The report then recommended, “While authorities in Nigeria are committed to taking action against unfair prices, they need stronger support to enable enforcement – from financial resources to political mandate, to high-quality data. This can enable more decisive action to strengthen competition in the marketplace, such as by sanctioning anti-competitive practices, tackling monopolies, and supporting small and medium-sized businesses.”
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