Nigerians struggle to survive, says United Nations

By Akinola Ajibade

Nigerians are in throes of death due to rise in prices of food and decreasing value of naira, against dollars and other international currencies, the United Nations Conference on Trade and Development, has said in a report.

The report stated that other developed countries are having their own shares of the problem, adding that the issue is having a telling effects on individuals in Nigeria, as the they are struggling to live a normal life.

Citing the increase in the drop out of students from school, the report ssid the problem is killing to people and the governments in particular.

UN, in a report titled: 'A Double Burden 'released this December, added  that the effects of food price increases and currency depreciations on food import bills are highly pronounced in Nigeria.

It said, “The price of food has increased everywhere, reaching historic levels in 2022, as stated by the Global Crisis Response Group.

“This is a challenge for food security globally, but particularly for net food importing developing countries. And unlike in previous food crises, they now face a double burden. They not only pay higher prices for the food they import, but the price increase is exacerbated by the depreciation of their currency vis-à-vis the US dollar.

“This erodes the fiscal space that many developing countries need to face the concomitant challenges of recovering from the COVID-19 pandemic, the cost-of-living crisis, and the climate emergency. This note assesses the potential effect of high prices of wheat and concurrent currency devaluations on the import bills of selected developing countries.”

The organisation explained that the world had suffered three major food price spikes in the current century. The first two were in 2007-2008 and 2010-2012, with a third one currently because of the COVID-19 pandemic and the war in Ukraine.

It stated that during the first two price spikes, the value of the dollar went down.

It said, “The depreciation of the US dollar and the consequent appreciation of other currencies made imports cheaper and provided some ease to food import bills for many developing countries.

“However, the current price spike is different. In an attempt to combat high inflation in the United States of America, the Federal Reserve increased its interest rates causing the US dollar to appreciate some 24 per cent between May 2021 and October 2022. This made the US dollar and the food that developing countries buy with it more expensive.”

According to UNCTAD, developing countries face a double burden of high food prices and the depreciation of their local currency against the dollar, and with national budgets stretched thin, net food importers are in a vulnerable position.

It added, “Research shows that exchange rates can have a significant impact on food prices. Take for example the price effects on wheat, the most widely cultivated crop in the world, for six countries: Egypt, Ethiopia, Mauritius, Pakistan, Peru, and Thailand.

“Since 2020 wheat prices have increased substantially. As of October 2022, the average price was 89 per cent higher than the average in 2020. During the same period, the average US dollar exchange rate vis-à-vis the respective national currencies rose between 10 and 46 per cent.”