Buhari’s Rice Pyramid Drives Price of Commodity Through the Roof

• On January 18, President Muhammadu Buhari unveiled rice pyramids in Abuja to tell Nigerians the country is self-sufficient
• After the unveiling, the price of rice hit the roof, making people believe the unveiling was a charade
• Some analysts believe the unveiling was staged while others believe the increase in the price of rice is a general inflation trend

President Muhammad Buhari unveiled rice pyramids in Abuja, ostensibly to show Nigerians the strides his government is making in ensuring food security in Nigeria and that the country is self-sufficient in rice production, a statement Buhari and his supporters have continued to mouth.

Prior to the unveiling of the pyramids, a video surfaced on social media of a woman waltzing through the pyramids exuding confidence in the strides of Buhari’s administration.

The unnamed woman said:

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“Everyone should come and see this. This is marvellous. This is wonderful. I have been hearing about it over the last few weeks and today, I am so delighted to see this. This is the good work of President Muhammadu Buhari”

But soon after the launch and unveiling, rice disappeared from the markets in Nigerian and where available, the prices became very exorbitant.

Pyramid unveiling, a charade, analysts say

This has led many to believe that the President’s action was a charade and that rice would have been mopped up from over the country to give the impression of impressive work being done by the Buhari’s government.

Others said that the increase in the price of the commodity is due to a general inflation trend across the country and in the world.

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They also cited the debilitating insecurity ravaging the north, a major food hub in Nigeria.

No, it is a general inflationary trend, others say

Osaze Omoragbon, an economist, in an exclusive interview with Legit.ng, said it is possible that the unveiling may have driven the price up but that it may also be indicative of general inflation trends in the country.

Omoragbon said:

“Yes, you may say they mop up the rice but how much rice did they mop in the country to affect the price of rice seriously? It could actually have been the reason and may not have been the reason.

“There are other issues to consider. There are logistical challenges. There are kidnappings across the country. You have insecurity across the country. We also heard that last year many farmers were killed when they were going to their farms. It is not something we can sit down here and say that is the reason the price of rice is up. There is a general increase in price."

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Omoragbon said the government would have rebagged the rice from a reserve. He said the government gave farmers a lot of money to invest in rice farming.

He cited Lake Rice, a partnership between Lagos and Kebi states. They get some of those rice and store it in warehouses, he said.

Early in January, the price of rice hovered around N23,000 to N25,000 for a 50kg bag and went through the roof soon after Buhari’s unveiling in Abuja, selling for N32,000 for long grain and N35,000 for small grain and above for 50kg.

Kelechi Mgboji, a financial analyst said if Nigeria has that much rice, why won’t it force the price of the commodity down?

Mgboji said:

“Business is a factor of demand and supply. So, if the price is going up, you can ask yourself whether the supply is sufficient. Whether supply is even improved not just sufficient. If the price is going up as you said. Price tells the story. It tells if the supply has improved.”

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Mgboji said that no death of farmers can affect the price of the commodity if it is really available.

Foreign exchange to blame for increase in price

Legit.ng reported that the President of Nigerian Rice Farmers Association, Aminu Goronyo, has blamed the rise in the dollar and weakened naira for the high cost of locally produced rice.

Goronyo said as the dollar rate rises over the years, farmers have had to spend more on fertilizers, and as the cost of production increases, the cost of rice is expected to go up as well.

In 2015, a bag of rice was about N7,500, but five years later, the cost of the grain has risen to about N30,000 in 2021 - rising by 300% within the period.

Source: Legit.ng