Rice sale: Nigerian government halts ₦40,000 subsidized rice

The Federal Government has canceled the sale of subsidized rice to civil servants and withdrawn the circular, instructing them to apply, on August 2, 2024.

A new circular from the Ministry of Special Duty and Inter-Governmental Affairs, obtained by Punch news in Abuja on August 8, 2024, revealed this.

The ministry, on August 1, 2024, instructed all interested staff members to complete a Google form on the Office of the Head of Civil Service of the Federation (OHCSF) website.

They were to submit the form to the director of human resources for endorsement.

Designated offices would coordinate the payment and distribution of the rice.

The chairman of the Joint Union Council of the ministry would serve as an observer to ensure transparency during the process.

A new circular dated August 2, 2024, signed by the ministry’s Director of Human Resources, Aderonke Jaiyesimi, did not provide a reason for withdrawing the initial memo.

The circular read: “I am directed to refer to our internal circular in the Ministry (Federal Ministry of Special Duties and Inter-Governmental Affairs) of August 1, 2024…

“On the above subject matter and to inform you that the internal circular is hereby withdrawn.

“Further details will be communicated in due course.

“Please bring the contents of this internal circular to the attention of staff in your respective departments and units for their information and proper guidance.”

Overview of Nigeria’s soaring food prices

To understand the rise in food prices in Nigeria, we need to examine the historical economic context.

This includes factors such as inflation, currency devaluation, government policies, and global market influences.

Here’s a breakdown based on the major administrations from 2010 to 2024:

Goodluck Jonathan Administration (2010 – 2015):
Nigeria experienced significant economic growth due to high oil prices.

However, there were rising concerns about government spending, corruption, and the devaluation of the naira.

In 2010, a 50kg bag of rice was about ₦7,000 – ₦8,000. By the end of Jonathan’s tenure in 2015, the price had increased to around ₦10,000 – ₦12,000 .

Muhammadu Buhari Administration (2015 – 2023):

Buhari’s administration faced challenges such as a significant drop in oil prices, economic recession (2016), and worsening inflation.

The closure of land borders in 2019 to curb smuggling further impacted food prices.

Following the 2016 recession, the price of rice surged to around ₦18,000 – ₦22,000 per 50kg bag.

After the border closure in 2019, the price further increased to about ₦24,000 – ₦26,000.

With the COVID-19 pandemic in 2020 and continued economic instability, prices peaked at ₦30,000 – ₦35,000.

In 2015, 50kg of garri cost ₦5,000, while in 2020 it rose to ₦20,000.

In the same way, 50kg of beans was ₦10,000 in 2015 and ₦25,000 in 2020.

Bola Ahmed Tinubu Administration (2023 – Present):

Tinubu’s administration has attempted to restructure the economy by removing subsidies on petroleum products, impacting transportation costs and food prices.

Inflation remained high, driven by factors such as currency devaluation and global supply chain disruptions.

The price of a 50kg bag of rice was around ₦40,000 – ₦45,000 in 2023.

However in 2024, reports indicate prices reaching ₦85,000, exacerbated by speculators and market inefficiencies

In 2023, sellers priced garri at ₦30,000 per 50kg and ₦50,000 per 50kg in 2024. Similarly, beans cost ₦35,000 per 50kg in 2023 and ₦60,000 per 50kg in 2024.

Key Drivers of rising prices

Inflation: Nigeria’s inflation has been a significant factor in the rising prices of foodstuffs.

Inflation rates have been consistently high, driven by monetary policies, supply chain disruptions, and external economic pressures.

Currency Devaluation: The naira’s devaluation has directly impacted the cost of imported goods, including food items, driving up prices.

Policy Decisions: Government policies, such as border closures and fuel subsidy removals, have directly influenced food prices by affecting the cost of transportation and the availability of goods.

This overview shows a consistent rise in food prices over the years, largely due to economic challenges and government policy decisions, with each administration facing its unique set of circumstances.

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