Presence Country
Special Report

Nigeria Market Monitoring Bulletin

January 23, 2017

IPC 2.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Concentration of displaced people
Would likely be at least one phase worse without current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.

IPC 2.0 Acute Food Insecurity Phase

1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET classification is IPC-compatible. IPC-compatible analysis follows key IPC protocols but does not necessarily reflect the consensus of national food security partners.
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

IPC 2.0 Acute Food Insecurity Phase

Presence countries:
1: Minimal
2: Stressed
3: Crisis
4: Emergency
5: Famine
Concentration of displaced people
Remote monitoring
countries:
1: Minimal
2: Stressed
3+: Crisis or higher
Would likely be at least one phase worse without
current or programmed humanitarian assistance
FEWS NET Remote Monitoring countries use a colored outline to represent the highest IPC classification in areas of concern.

Key Messages

  • With the Nigerian petroleum sector in crisis, the agricultural and solid minerals sectors have recently recorded positive growth. This follows strong support from the Government of Nigeria (GoN) and dynamic private sector responses, and encourages a more diversified economy. Therefore, despite the many challenges facing the Nigerian economy, some positive trends emerge.

  • Declining revenues from crude oil sales resulted in a sharp decline in the availability of foreign exchange reserves in 2016 (Figure 1). As a result, the Central Bank of Nigeria (CBN) adopted a floating exchange rate, quickly narrowing the gap between the official and parallel (Bureau de Change, BDC) exchange rates. The resulting 40 percent reduction in the value of the Nigerian Naira (NGN) led to increasing costs for essential imported items, including food (rice, wheat, sugar, legumes, and edible oils) and non-food items. This, in turn, has reduced purchasing power, especially for poor market-dependent Nigerian households.

  • In an attempt to promote local production, the Nigerian government has adopted various direct and indirect measures to restrict imports, and encourage the consumption of locally produced goods. At present, the net impact of these policies on overall food security is unclear.

  • Locally-produced staple food prices declined seasonally in November and December (Figure 2). However, prices are more than double their 2015 and five year average levels. These trends are driven by high inflation and the continuing depreciation of the NGN. The very high prices of 2016 are believed to have incentivized an expansion in area planted and production, resulting in record high grain production in Nigeria during the 2016/17 production and marketing year.

  • Although agricultural production increased in 2016/17, Nigeria remains heavily dependent on imports from regional and international markets to meet food needs, a trend that is expected to persist in the short and medium term. Furthermore, the depreciation of the NGN vis-à-vis regional currencies (such as the XOF) has led to high regional export demand. This may result in below normal stock levels in Nigeria during the 2017 lean season. The inflationary impacts of the depreciating NGN are stronger than the effects of this year’s supply response, and prices are expected to remain at their very high levels through the current marketing year and lean season.

About FEWS NET

The Famine Early Warning Systems Network is a leading provider of early warning and analysis on food insecurity. Created by USAID in 1985 to help decision-makers plan for humanitarian crises, FEWS NET provides evidence-based analysis on some 34 countries. Implementing team members include NASA, NOAA, USDA, and USGS, along with Chemonics International Inc. and Kimetrica. Read more about our work.