nigeria food security outlook january to june 2010€¦ · annual inflation in october 2009 was...

FEWS NET Nigeria Abuja Tel: (234) 9 461 4921 [email protected]

FEWS NET Washington 1717 H St NW Washington DC 20006 [email protected]

FEWS NET is a USAID-funded activity. The authors’ views expressed in this publication do not necessarily reflect the view of the United States Agency for International Development or the United States Government.

www.fews.net/nigeria

NIGERIA Food Security Outlook January to June 2010 • Food security conditions are mixed across the country,

reflecting different food and fodder production levels and disparities in food prices and income earning opportunities. Inflation rates are relatively high and rising due to high prices for meat, fish, and seafood, as well as speculation regarding fuel prices as the government prepares to deregulate unleaded fuel in January 2010.

• In the extreme north, poor household access to food will be

significantly constrained in March instead of June or July in a normal year. The epicenter of food insecurity is the northern parts of the states of Borno, Yobe, Jigawa, Katsina, Zamfara, Sokoto and Kebbi, where tightening food supplies, high food prices, fodder shortages and low income earning opportunities have started to limit faming and pastoral household access to food. By June, the number of food insecure household will increase significantly. Pastoral households will face a significant deterioration in their terms of trade, constraining their purchasing power and limiting their access to basic food Government intervention, will intervene, in the form of subsidized sale of grain will be needed to mitigate poor household food insecurity.

• Household food security is generally favorable, in the North Central from January to June, as market food supply is high

and most households rely on own produced crops for food. In the South, parallel increases in the prices of gari, basic household items, and fuel without commensurate increases in wages will constrain poor households’ access to food in February and March in the coastal areas (Bayelsa, Delta, and Cross Rivers). As of April, the hunger season will peak, and the prices of gari and the cost of basic staple food will experience their steepest rise. Moderate food insecurity will extend to all southern states. Cross‐substitution with seasonal crops, as well as labor opportunities and remittances will keep most households from plunging into high food insecurity.

Seasonal calendar and critical events

Source: FEWS NET

Figure 1. Current estimated food security conditions, November and December 2009.

For more information on FEWS NET’s Food Insecurity Severity Scale, please see: www.fews.net/FoodInsecurityScale

Source: FEWS NET Nigeria

NIGERIA Food Security Outlook January to June 2010

Famine Early Warning Systems Network

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Current food security conditions The rising inflation rate is adversely affecting net consumers’ purchasing power nationwide, restricting their access to food and non food items. According the National Bureau of Statistics (NBS), inflation has risen significantly since the second quarter of 2008 due to the global economic down turn and rising food and fuel prices. Annual inflation in October 2009 was 11.6; this rose to 12.4 in November 2009. Annual inflation of food prices is higher, in general, and rose from 13.5 percent in October to 15 percent in November. The rate of increase in November was also higher than that of October, primarily due to high transportation costs as excessive speculation regarding the government’s plans to deregulate unleaded fuel in January 2010 led to high fuel prices nationwide. According to the Bureau, the recent rise the general inflation in October is attributable to food price inflation, particularly for seafood, fish, and meat. The exchange rate between the naira and the CFA has stabilized at a low level vis‐a‐vis the West African franc CFA. The low value of the Naira benefits foreign traders seeking to export Nigerian goods to their countries of origin. However, the expanded market for Nigerian goods translates into high demand for Nigerian cereals in highly deficit Chad and Niger, and higher food prices in Nigeria. If the prices in Nigeria rise enough, unfavorable price differentials will discourage foreign traders from buying in Nigerian markets. North In the major parts of North, including the north central states of Niger, Kaduna, Kano, Plateau, Gombe, household food security is generally favorable, as most households still rely on own‐production for daily meals following the October 2009 harvest. The area of concern is the northern parts of the states of Borno, Yobe, Jigawa, Katsina, Zamfara, Sokoto, and Kebbi, where the Joint CILSS/WFP/FEWS NET/Government post‐harvest mission in October determined that 2009 cereal production in these areas falls short of requirements, following extended dry spells and an early cessation of the season. In this epicenter of food insecurity, prevailing high food prices (above the nominal five‐year average and above 2008’s high prices), limited income earning opportunities, and high household expenditures are threatening food security among the poor only two months after harvest. Food prices are rising due high traders’ speculation, high household and industrial demand, and high fuel prices. FEWS NET field enumerators report high traders’ speculation throughout the North as most traders are keeping substantial supplies off markets to be sold later at high prices in the food insecure areas of the extreme North and neighboring countries. Industrial demand is very high as breweries and pharmaceutical companies are buying sorghum extensively while food processing companies and poultry industries are buying maize, cowpea, and millet. Churches and households are purchasing cowpea and maize in anticipation of the Christmas and New Years Eve holidays. The ongoing sorghum harvest has no perceptible impact on food price, as the bulk of the newly harvested sorghum has not reached local and urban markets yet. Market conditions in November were marked by substantial increases in food prices when compared to their nominal four‐year averages and last year’s prices at the same period. Millet prices are 35 percent above the four‐year average in Dandume, Katsina State, in the Extreme North while maize prices are 17 percent above the average in Saminaka, a major maize market in Kaduna state in the North Central. Sorghum prices are average in Giwa but 20 percent above the four‐year average in Saminaka and Dandume . In Dawanu, the major international wholesale cereal market in Kano, sorghum and cowpea prices were 21 and 35 percent higher than the nominal five‐year averages. This year, food prices experienced their first significant rise in November in most markets monitored by FEWS NET, instead of in January or February in a normal year. In Dawanu market maize, millet, sorghum and cowpea prices each rose significantly in mid December compared to November prices. The same is true for maize in Kaura, millet in Kaura and Dandume, and sorghum in Saminaka. The early rise in food prices is indicative of unseasonably higher food prices and tighter supplies. The current trend in rising food prices is likely to continue. Information provided by FEWS NET enumerators in Kebbi State indicates that pastoralists from northern Nigeria, Benin, and Niger Republic are converging in significant numbers in the grazing areas of Sokoto and Kebbi, contributing to overgrazing and leading to rapid depletion of vegetation and water resources. Resource‐induced conflict has resulted in two deaths in Northern Kebbi. The situation is likely to worsen in the next coming months as competition as overcrowding intensifies.



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The Federal Government Grain Reserve has a capacity of 68.749 MT comprised of 7000 MT of millet, 58,000 MT of sorghum, 3000 MT of maize, 140 MT of rice and 600 MT of gari as of the first week of December 2010. The government is buying an additional 170,000 MT of cereals. The government intends to sell these supplies subsidized prices (50 percent of market price at time of sale) to targeted food insecure areas when food market prices rise significantly. The quantities are insufficient to mitigate food insecurity in the extreme north. For the operation to have any impact on household food security, State governments need to provide additional supplies, and the poor households most in need must be identified and targeted. South Food security is generally stable in the South due to the recent harvest; the widespread availability of tubers, cereals, and seasonal crops; and opportunities for off‐season recessional crop production and fishing. However, the rising inflation rate and high prices for gari, the major staple food for poor households in the South, are threatening food security among poor households in areas of the coastal states and the southwest. Though gari prices dropped after harvest in October, gari prices in the Bodija market, in Ibadan, Oyo State, in November remain 54 percent above the nominal five‐year average and 33 percent above last year’s price. Most likely food security scenario (January – June 2010) The most likely food security scenario for January to June 2010 is based on the following key assumptions:

• The value of the Naira remains stable and low relative to neighboring currencies, favoring continued export of cereals.

• The Federal government achieves its goal in stocking approximately 238,000 MT of cereal reserves. These reserves are sold to households at prices 50 percent below market rates, but distribution will likely be delayed and targeting poor.

• Most states in the extreme North purchase cereal reserves to complement Federal government reserves.

• Fuel prices will rise above their current levels following deregulation of prices of unleaded fuel in January 2010. As a result, prices of both food and non‐food items will increase due to increases in transportation cost.

• Inflation rates will continue to rise. • No significant rise in wages is expected during the current season. Prevailing wage rates will not keep pace with

inflation. • Unusually high numbers of pastoral households from neighboring countries such as Niger, Chad and Benin will

converge to the pastoral grazing areas and livestock reserve in the extreme north of Nigeria, contributing to rapid depletion of pastural resources.

Food security will start to deteriorate, in January, in the Extreme North and the coastal states of the South as the number of households turning to markets for food increases significantly (Figure 2). As of April, market supplies of food that were seasonably high after the October harvest will be drawn down by high food demand across the country, due to extensive industrial buying, especially for the most traded commodities such maize, sorghum, and cowpea. The number of food‐insecure households will rise further in May and June, following the depletion of household grain reserves among the poor, very high food prices, high household expenditures for land preparation and planting, and limited labor opportunities (Figure 3). With the exception of the North Central, where food supply is seasonably high and household access to food favorable, all the states will be moderately food insecure in April, May, and early June ( Figure 3).

Figure 2. Most-likely food security scenario, January-March 2010

Source: FEWS NET



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Farming households will be busy preparing their land and planting, throughout the country, from January to June. With scarcity and late deliveries of government subsidized inputs nationwide, most farming households will have to sell a portion of their food reserves in May/June to source their inputs from the open market at high prices ranging from NGN 4,000 ‐ 5500 for fertilizers. These increased expenditures at a time when poor households resort to markets for food after the exhaustion of their food reserves, will lead to low usage of improved seeds and fertilizer. Extreme North The scenario for the extreme north from January‐March anticipates a rise in the number of areas with moderate food insecurity due to a significant rise in cereal prices, reduced food supplies at household levels, and limited income earning opportunities. Conditions will deteriorate in February and March as more poor households depend on markets to buy their food at above‐normal prices. The poor distribution of 2009 rainfall in Sahelian areas of Niger, Mali, Burkina and Chad led to poor production, and food supplies there will be critically low, in these countries, until at least September 2010. The low value of the Naira relative to neighboring currencies will encourage traders, governments, and international humanitarian organizations to buy food in surplus producing areas of Nigeria to mitigate rising food insecurity in the Sahel in anticipation to the early onset of a harsh hunger season. These purchases will be constrained only if food prices in Nigeria rise sufficiently to compensate for the price differential between Nigeria and the Sahel. The pace and volume of cross‐border trade will be partially (informally) restricted this year. In addition to long‐lasting restrictions such as poor road conditions, illegal taxes at borders, administrative problems and insecurity on the roads that increase the cost of exports and import transactions, high food prices limited, supplies in the Extreme North and unfavorable prices differentials could constrain informal and formal trade levels between Nigeria and neighboring countries such as Niger and Chad. However, the persistent low value of the naira versus the CFA will encourage Niger and Chad traders to buy from Nigerian markets. With limited market availability, the extreme north will need to import food from surplus‐producing areas of the North Central. Though major markets, in the North Central such as Saminaka, Funtua, in Kaduna State, Jos, Tundun Hatsi, Mina in Plateau, Gombe and Niger states will have adequate food stocks to supply the Extreme North with large quantities of maize and sorghum, the low purchasing power of poor households in food insecure areas of the Extreme North will constrain movement of stocks into the affected areas. As a result, market supplies will be below normal, and prices will be above normal. Competition for pasture and water resources will intensify in the Extreme North towards the peak of the dry season in April/May. As the level of resource‐based conflict increases, Nigerian and foreign pastoral households will move their herds to better pastoral areas in the North Central and the South. Trekking long distances will contribute, however, to poor animal body conditions and limited milk yield for those pastoral household members who stayed at home Better‐off pastoral households’ will move their herds to areas of good pasture using vehicles. Livestock prices will start to drop due to poor body conditions and increased livestock supply in the markets due to increased sales, in the affected areas in the Extreme North, causing pastoralists’ terms of trade to deteriorate. Some pastoral households, who were not able to move southward due to miscalculations of this year’s early transhumance period or lack of basic resources, will be trapped. Their animals will be too weak to walk long distances. Their animals will be too weak to produce milk, eliminating a consistent source of food and revenue. Without sufficient pastures, pastoralists will have to support their herds on animal feed, for which prices will be high, thus increasing the cost of maintaining livestock. Meeting the food needs of both the herd and the household at high prices will force poor pastoralists to intensify the off take of livestock. Livestock prices will drop significantly in the affected areas, while food prices continue to rise, constraining significantly pastoral household purchasing power and deteriorating their terms of trade. Many poor pastoralists will have to sell more livestock than they can regenerate easily, dipping below the livelihoods threshold of food insecurity. Acute malnutrition levels among these poor pastoral households will increase.

Figure 3. Most-likely food security scenario, April-June 2010

Source: FEWS NET



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Dry season cultivation, predominant in Sokoto, Yobe, Jigawa, and Borno, will be completed in May. This year however, dry season production will bring limited relief to poor households due to low water availability in the Extreme North. Income earning opportunities will be limited until May/June because the main season harvest ‐ a period of peak labor demand ‐ is finished, dry season farming is below normal due to low water availability, and market activities are normally slow between January and March. As of April, poor households will depend primarily on remittances and labor migration as the two major sources of income. These sources of cash will not be sufficient to compensate for the substantial high food prices and limited household reserves and to cover poor household food requirements. If the situation is not properly addressed, an increasing number of poor households will slip into moderate to high food insecurity in the Extreme North by June. The most affected households will be those who have limited food stocks, (only four or five months of own‐production, rather than eight or nine in a normal year), following the poor season in the area, as well as those who were forced to oversell their already limited stocks due to pressing financial needs after harvest. The government will embark on interventions, centered on the sale of tubers and cereal crops at subsidized prices. Sorghum, maize, millet, rice and gari will be sold to households at the subsided rate of 50 percent in targeted food insecure states such as Borno, Yobe and Jigawa. In order to be effective, the households in need should be targeted, the distribution channels improved, and the quantities of food involved increased substantially. North Central From January to early May, food security conditions will remain generally favorable in the North Central, including in the states of Niger, Kaduna, Plateau, Nassarawa, Adamawa, and the southern parts of Borno, Yobe, Sokoto, Zamfara, and Kebbi, where most households have food reserves from the 2009 harvest. With carryover stocks from last commercial season and the recent harvest, food availability remains favorable at market and household levels. Employment opportunities will be seasonably high as market transactions, water availability and dry season farming will provide labor opportunities such as transportation, construction work, and dry season cultivation. Poor household food security conditions will start to deteriorate in June, but food insecurity will not peak until July/August, when food supplies will decline significantly at household and market levels and food prices will rise significantly. The households who faced extended dry spells in the Southern parts of Gombe and who lost their productive assets due to flooding in Zamfara, will be particularly affected. South Household food security conditions will be favorable in the South in January and February 2010 due to the good 2009 harvest that led to adequate market supply and good household restocking. Food security among poor households will start to deteriorate in March, which is normal. As the hunger season peaks in April, market supplies will decline substantially, when compared to previous months, due to normal household consumption demand, food exports, and the extensive use of cereal and tubers as raw material for poultry feed, beverages, and processed food by private companies. Southern households will face high expenditures due to heavy investments in land preparation in January and February. In addition to these expenditures, high fertilizer prices and gari prices that will rise further from their currently high levels will contribute to worsening food security for the poor. Poor households will cope by substituting gari with lower‐cost seasonal foods and by intensifying seasonal coping strategies. Many income earning opportunities exist during that period in the South, including timber logging and brick making. Most households will also reduce non‐food expenditures such as clothing and social events. Given that access to seasonal crops, legumes, and fruits will be constrained by high prices in April, May, and early June, these options will not be sufficient to cover entirely poor household food needs and most poor households will remain moderately food insecure, until late June, when the early‐harvested maize and yam will arrive in the markets. In the coastal states, poor households who lost their productive assets to excessive flooding in June – August 2009 will become moderately food insecure in February/March, instead of April in a normal year. They will divest some assets in order to meet food needs. They will remain moderately food insecure until late June, when the early harvested maize and yam will arrive in the markets.



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Table 1. Possible events that could change the most likely scenario during the outlook period. Geographic

Area Possible events Impacts on food security conditions Probability*

Variables to monitor

National Migration of a significant number of poor households from Niger and Chad to Northern Nigeria

Food insecurity rises to extreme levels in Niger and Chad during the April-June period forcing a significant number of poor households to migrate to Northern Nigeria in search of labor opportunities and food. The migrants compete for employment with the indigenous population, exerting pressure on already limited resources, leading to localized conflicts. Food insecurity worsens in the Extreme North as food availability dropped in local markets and food prices rise without commensurate rises in wages. food supply drop and food prices rise significantly in the affected areas. Government and international organizations intervene through a program aimed at food distribution and resettlement of the migrants.

Unlikely Migration levels in Northern Nigeria; food insecurity levels in areas where migrants are; government interventions

National Worsening of the economic down-turn

Formal job availability drops, particularly in the financial sector and other sectors highly dependent on the banking industry for capital (real estate, oil, construction, and food processing). Informal labor opportunities in agriculture transportation and construction fall, depressing wages. and constraining poor urban and rural household purchasing power. Households respond by intensifying alternative income-generation strategies such as petty trade, and in rare cases, by reducing non-food and food consumption.

Unlikely Inflation rates, food prices

South Following a very late onset of the season and critical rainfall shortages between April and June the early maize and yam harvest is compromised in June

As the hunger season sets in, in the South, in April, food insecurity conditions worsen. The early harvest , in June, provides a first relief to these households who face food shortages and high food prices. If the June maize and yam harvest is compromised, the lean period will be extended, plunging poor households into high food insecurity and pushing them to migrate to cities and engage in petty trade to earn money and buy food.

Unlikely Outcome of the June harvest; Food availability and prices following the early maize and June harvest; general household food security after the harvest.

Niger Delta and surrounding states

The government amnesty program aimed at curving political violence in Niger Delta is not successful; political violence in Niger delta extends to surrounding states

Violence resumes in Niger delta, extending to neighboring Bayelsa and Cross Rivers. Supply of affected areas and access to markets constrained by violence. Population displaced to shelters.

Unlikely Sharp increases in violence in the area; food supplies and prices in the area;

* Probability levels Description

Unlikely Could occur in the time period if conditions changed moderately

Very unlikely Could occur in the time period if conditions changed significantly

FEWS NET Nigeria Abuja 234-9-461-4921 [email protected]

FEWS NET Washington 1717 H St NW Washington DC 20006 [email protected]

FEWS NET is a USAID-funded activity. The authors’ views expressed in this publication do not necessarily reflect the view of the United States Agency for International Development or the United States Government.

NIGERIA Monthly Price Bulletin December 2009

Monthly prices are supplied by FEWS NET enumerators, local government agencies, market information systems, UN agencies, NGOs, and other network and private sector partners.

Sorghum, maize, millet, cowpea, gari (fermented cassavastarch), and rice are all found in Nigerian markets. Sorghum, millet and maize are widely consumed by most households, but especially in the north, and are used by various industries. Maize is mainly used by the poultry industry as a raw material for feed while sorghum is used by breweries for producing beverages. Sorghum and millet are important for households in the north, particularly the border markets where millet is also heavily traded with Niger. Gari is widely consumed by households in the south and some in the north. Rice is produced and consumed throughout the country. The north is a major production and consumption area for cowpea which flows to the south for use by households and food processing industries. Ilela, Maidua, and Damasak are all critical cross‐border markets with Niger. Saminaka, Guiwa, Dandume, and Kaura are important grain markets in the north, which are interconnected with the Dawanu market, the largest wholesale market in West Africa, and some southern markets such as Bodija in Ibadan. Millet, sorghum, maize, and cowpea are among the most important cereals traded at Dawanu, while cassava and some cereals are traded with Bodija.


Famine Early Warning Systems Network 2



The Dawanu Market in Kano (wholesale prices)

nigeria food security outlook january to june 2010€¦ · annual inflation in october 2009 was...

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