In a week where the National Bureau of Statistics confirmed that the rise in inflation had slowed, fledgling Lagos-based research organisation, SBM Intelligence, has released a new product called SBM Jollof Index which examines the cost of preparing a Nigerian delicacy – Jollof Rice, for a family of six.
The Jollof Index, released Monday, tallied partly with the NBS’s inflation report in that while overall inflation has slowed, food inflation, which is a vital part of it, has not. The SBM Jollof Index was created as a composite index to give a birds eye’s picture of national inflationary trends seeing that Jollof Rice is a national delicacy. The constituent ingredients in SBM’s pot of Jollof are rice, salt, curry, thyme, seasoning, vegetable oil, pepper, fresh tomatoes, tinned tomatoes, onions, beef and turkey.
SBM’s tally of the ingredients’ prices from the second half of 2016 has shown a quarter by a quarter increase in the average national index– from ₦4,087 in July 2016 to ₦5,388 in February 2017. An analysis by geopolitical spread shows that the most expensive place to cook Jollof Rice in Nigeria is Kano where it would cost ₦6,640 to put together the delicacy in Q1 2017. This contrasts with Lagos, where a pot of the meal will set you back only ₦4,950, the lowest in the country.
The south-eastern cities of Onitsha and Awka are also very Jollof-friendly at ₦4,960 each, while in the national capital, President Buhari’s pot of jollof rice will cost a hefty ₦5,750 if the ingredients were purchased from Wuse, the closest major market to Aso Rock – a mighty delicious incentive for government planners to do more to keep one of the country’s few culinary joys from getting out of reach of consumers.
The rise in costs resulted from various factors. In Kano, for example, the Tuta absoluta outbreak from last year, contributed to a rise in the cost of tomatoes, a major ingredient for Jollof Rice. In the South-East, the closure of the Artisan’s Market in Enugu contributed to a rise in the cost of meat as many Enugu buyers chose to go to Onitsha and Awka to buy, causing a rise in prices in those towns.
On March 8, 2017, SBM researchers went out in the Ikeja area of Lagos and spoke with fifty randomly selected street corner traders regarding the effect of rising food prices on their lives. Each respondent answered four questions regarding their monthly expenditure on food, how rising costs have changed their financial habits, how these costs have affected other parts of their lives, and what they may be doing, if anything, to improve things.
Of the interviewees, thirty percent spend ₦60,000 per month on feeding or more. Sixty percent spend ₦30,000 per month on feeding or less. The rest spend between ₦30,000 and ₦60,000 a month on feeding. Only ten percent of our respondents said that the current inflationary trends for food items have not affected other aspects of their lives, while eighty percent of our respondents have been forced to change their financial habits because of the rise in food costs. Nigerians across the country have decidedly become more methodical in allocating their finances.
In addition, Nigerians who were ordinarily loyal to specific brands have taken to buying whichever brand is available on the shelves when they want to buy. They have become more willing to explore more alternatives as pricing of preferred brands become more out of reach. Increased inflation also means that more people have moved away fro bulk buying for the month and now embrace the “buy as you need” model.
Cheta Nwanze is Head of Research at SBM Intelligence.