Effects of Food Price Spikes on Household Welfare in Nigeria
In: ZEF-Discussion Papers on Development Policy No. 248
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In: ZEF-Discussion Papers on Development Policy No. 248
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Working paper
Beside the mixed evidences on transmission of international food price volatility to local markets and the desirability or otherwise of reliance on stabilisation policy to cushion the effects, very little is known about the key drivers of price spikes and volatility in sub-Saharan Africa. This paper is an attempt to bridge this gap, by focusing on the patterns, drivers, and policy responses to food price spikes and volatility across in Nigeria. The study was based on 16 years panel data on average monthly prices (2001:1 - 2016:12) of major food commodities across local markets in the 36 States of Nigeria, supplemented with monthly series of relevant domestic policy variables, and international prices, among other factors. Data analysis was mainly within the framework of fixed effects models. Findings suggest that food price upsurges in an average Nigeria market is more strongly related to spikes than volatility. International factors such as crude oil price, international food prices, and global beginning stock to use of coarse grains, and domestic policy variables such as real exchange rates, monetary policy rates and narrow money are strong influencers of spikes in the price of one or more food commodities in Nigeria's local markets. Higher petrol price and food production variability may substantially advance price instability in local food markets. Government policy actions at addressing volatile food prices immediately after the 2007/2008 food crises appeared to enhance food price stability. These findings call for greater attention on management of monetary policy, including the exchange rates, ensuring stable petrol price, limiting food production instability, mitigating spill-over of price upsurges from international markets and building farmers and consumer's resilience against food price changes, among others, as important pathways to address short and medium-term food price upsurges.
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Malnutrition, mostly resulting from poor food, health, and care practices, is related to physiological, socioeconomic, and psychological factors and remains one of the leading causes of mortality in children under five years of age in low- and middle-income countries. Nigeria, as with many parts of the world, is experiencing a multiple malnutrition burden, where undernutrition, including micronutrient deficiencies, exists alongside overweight, obesity, and associated diet-related non-communicable diseases. Recent data show that 37 percent of children under five years of age are stunted while 68 percent suffer some degree of anaemia. Overweight and obesity are also common among adults with prevalence rate of about 33 percent. The Nigerian government embraces sustainable food system approaches in its policy and programmes to address malnutrition problems in the country. Food systems approaches take a holistic understanding of all activities and processes involved in food production, processing, storage, transportation, trade, transformation, retail, and consumption. In this paper, we identify and discuss the types of research that can support the operationalization of food systems approaches to improving the quality of diets in Nigeria. Specifically, we structured a consultative workshop with key stakeholders, reviewed the literature, and applied food systems framework to the Nigerian context. The process enabled us to identify 39 research questions crucial to: understanding how changes in food systems can lead to healthier diets; identifying and testing entry points for improving availability and effective demand for healthier food; and creating at scale a supportive policy and market environment for achieving heathier and sustainable diets in Nigeria. ; Non-PR ; IFPRI1; DCA; CRP4; 2 Promoting Healthy Diets and Nutrition for all ; A4NH ; CGIAR Research Program on Agriculture for Nutrition and Health (A4NH)
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