Higher Food Prices Illustrate Policy Failure - David Olujinmi

Hinzugefügt: 2026-05-07

[00:00:04]Big news of course of the day is former president good luck Jonathan says that he is going to consider consult widely to run for president in 2027 and of course one of the big issues that will be discussed is energy we just talked about that with our business analyst chamba another is the cost of living food and here of course going to be another big election point in 2027 this is the latest uh jalof index uh from SPM intelligence and you can see a link being drawn on from what's happening at the straight of Ormuz to your kitchen or your kitchen table. So from Ormuz to the pots the SPM jalof index for Q1 2026 and basically the report says that the cost of making a pot of jellof rice is up almost 20% from October of last year.

[00:00:46]David Olujimi is a financial analyst with SPM intelligence. He joins us now.

[00:00:50]David, thank you uh for being with us.

[00:00:52]>> Yeah, thank you so much for having me.

[00:00:53]>> Is this a proxy for inflation?

[00:00:55]>> Basically, yes. So it's a it's a is a it's a the port of Jalof basically defines the most inclusive meal that Nigerians eat. So all across Nigeria, all across the 36 states, all across the 774 local government, everywhere you go in Nigeria, everybody eats rice.

[00:01:12]>> They love rice. So we basically have like a very um on the street on the go version of our inflation report where we try to track what is what are food prices saying because food prices have basically been the drivers of inflation in the country. They make up a large portion of our inflation basket. So we go with that same mindset and we go to the markets across eight states in the country to the main market to track the items the very independent items tomato pepper onions rice and the condiments including the proteins chicken turkey fish to track all of those things that people use in making jolof fries. So it just gives us like a very broad view a very streamlined and on the on the spot assessment of inflation in the country.

[00:01:57]>> Fantastic. Now what's explain I love the very eye-catching cover of the reports that draws a line from the straight of moose all the way to a port of of jelloof rice. Um so essentially you draw the link for us. You're saying that the higher oil prices >> so basically what we have now is we don't have any guard drills that protect Nigerians from the impact of oil price rising across the world. So from any for from wherever it happens if it happens in Venezuela it's going to affect us here. If it happens like we've seen it happens in Iran, it's affecting us here in the sense that the cost of transporting a ton of grain from Cano to Lagos. According to our report, it increased from 50,000 to 75,000 between October till this period. That's about that's a that's a 50% rise because the cost of diesel has increased. Right now, we're seeing diesel at 2,000. by the time we're tracking the reports that was about 1,500. This is coming from 1,100 1,000 error that we're seeing in October. So, we've seen a very direct impact when diesel goes up when fuel goes up most especially diesel because trucks diesel power trucks power um trans power power transportation of um agricultural items. So, >> from the price of diesel to the price of transportation to the price of the market to price in the market basically.

[00:03:14]So it's a very direct impact. That's why that's the reason why we just found a link when you link when when you want to talk about what caused the oil price increase talk about this trade of hormones. All of that all of that action in it's a direct flow.

[00:03:28]>> Thank you for that. Okay look so again big news of course president good Jonathan said he's going to consider uh consult before he runs for office for president in 2027. We're just live at his office there. We're talking policy and you mentioned policy in your report because this ties directly to this election that's coming up uh in 2027.

[00:03:47]And if you look at your the quotes from your uh report, it says that the strait of Ormuz now sits at the end of every Nigerian street and the Jalof port has become the most honest ledger of policy failure. Explain that. What are you talking about? So the point of that statement is the whole the essence of that statement is to basically talk about the fact that whatever happens across the world Nigeria has no policy to protect itself.

[00:04:13]>> Yeah. So there needs to be some form of um government intervention. There needs to be policy intervention in the sense that we don't know what's going to happen tomorrow. We don't know what's going to happen next year. Anything is possible. Anything can happen. Apart from what's going on between US and Iran, there are also a number of factors that can come into play. Anything is possible. So Nigeria needs to come into that place where there needs to be we need to start having policy intervention to protect the consumers >> because consumption basically is the bulk of the GDP. When people unable to consume, government is unable to get taxes. It affects all of the economy. So we need to start coming up with systems that can protect the consumer the average consumer in the streets that ensures that people don't begin to feel you ask. So we also have we also did another report that's different from this. You discover that 80 something% of the traders in the market can tell you why the prices of oil increased. They tell you is the Iran war. Nigeria and Iran basically do not have one large bilateral relationship. We don't have it. But you can imagine that something going on as far as thousands of miles away from us has that much impact on us to the point that even the people who don't who don't listen to CNN or any um of the global or any of the top any of big news stations >> like Arise News >> like like Arise News. Exactly. They actually know what's going on.

[00:05:33]>> They actually can tell you. So there's that policy there's that policy intervention that needs to come into play.

[00:05:38]>> Like I'll use example of in Ghana they have the pricing window. But they also have the same in Kenya too. Policies systems that can serve as some form of guard rails >> that can servers.

[00:05:49]>> Makes sense. And you you actually you mentioned Ghana in your report. Before I get to Ghana, the regions in Nigeria, you've got different um it's I mean I thought it was the north the northern region that was seeing the most price pressure but also seeing that in the south as well. So how is that playing out? Who's who's getting the most feeling the most pressure?

[00:06:05]>> So from our report, the people who saw the most price pressure were the people in River State. So we saw that there was a 55% increase in from October last year till till um March this year when we track the data and um for the people in the north one of the reasons why they are seeing that price pressure is because of the ongoing headers farmers clashes there's a lot of insecurity >> there's a lot of sacking of farmers from their farms >> and there's also now for people in the south what is now hitting is the logistics cost so even when the people in the south have the advantage of okay they can import some of these things like rice.

[00:06:41]>> Yeah, >> they don't have the the still transportation is still going to play a huge role. Logistics is still is still going to play a huge role.

[00:06:51]>> Okay. Now going to Ghana. Um lovely country and lovely people. You you've compared I love this chart you have. I think it's 435 CDs now to create. So for Ghana the is it what the price increase was not as high as ours or >> so so Ghana Ghana is basically in a situation where food inflation is low in their country >> very low like 3% now or something for April is 2.2%ow 2%. So they have they're enjoying some bit of price stability.

[00:07:20]They've not had the kind of runaway cost of the dollar that we had the effect of runaway cost. So between 2022 till date their currency basically appreciated unlike ours that depreciated by a lot.

[00:07:34]>> So they have that um advantage. They also have the advantage of the a lot of food importation.

[00:07:39]>> Yeah.

[00:07:39]>> They import a lot of food items. They import from Nigeria. They import from Bina Faso and they also import from Togo. They import from Ben Republic. So they import a lot. And when you when you're import dependent country, runaway cost of the dollar would usually kick in. But for a country that is enjoying currency stability, it's the other way around for them.

[00:07:59]>> And I think you have a really nice chart where you compare on a dollar basis um Nigeria and Ghana. Nigeria of course is is uh is is much Yeah, there it is. I I really enjoyed this. So when we did the dollar cost comparison, you discover that real time um real time the benchmark is 100 year. There's been a 51% increase in food prices since 2023.

[00:08:22]>> While for Ghana, it's actually declined like I said because they have a they have the factor of not suffering >> their currency devaluate. So they've had it actually appreciate between 2023 till where we are in 2026.

[00:08:36]>> Gotcha. Um back to policy. Yeah, I'm going to immediately I'm going to actually going to combine this now. So what what I know that effective July 1st we have slashing imports import duties duties. Thank you for in Nigeria. So what kind policy what kind of policy are you looking at to try to reduce food prices?

[00:08:51]>> So um one of the policies to reduce food prices is a different thing but to actually create some form of guardrails to to prevent Nigerians from suffering the kind of dramatic increase in before prices. I think Nigerians needs to start looking at things like a dollar reserve.

[00:09:05]Right.

[00:09:07]>> We used to have it before and I know that subsidy is a very dicey subject but we used to have things like an equalization fund in the past. So there needs I feel like the government needs to start coming up with ideas like that to to sort of >> um act as a shock absorber. If anything happens that sends the prices of crude oil skyrocketing, then stuff like then funds like that can kick in and help to regulate the actual pump price for Nigerians on the street. Then when we have it back to the normal state, then we can go back to what it used to be. So we need to start coming up with um policy interventions. There also needs to be policy. There also needs to be um legislative debate as often as possible on pump prices because pump prices have a very direct impact on everything on household consumption spending in the country.

[00:09:57]>> But like I said, petrol reserves need to actually start coming into the conversation at this point.

[00:10:02]>> Fantastic stuff. David Olujimi, financial analyst with SPM intelligence.

[00:10:07]Thank you so much for joining us to talk about the latest Jalof index. We appreciate your time.