Nigeria's rising food prices: What should be done

Nigeria's food inflation rate remains a concern, with a year-on-year increase despite a slight decline in September. Kola Masha, the Managing Director of Babban Gona, joined CNBC Africa to discuss the underlying issues affecting food prices in the country and what needs to be done to ensure food security for all Nigerians. Masha pointed out that Nigeria faces a significant challenge in farm productivity, which is driving up prices of essential commodities. The conversation highlighted the need for increased investment in the agricultural sector to boost productivity and ultimately stabilize prices. Masha emphasized the importance of capitalizing on the current demand in the domestic market by investing in technologies that can enhance productivity and increase supply. He cited the example of maize prices, which have shown signs of moderation following an increase in supply. Despite the potential impact of storage facilities on price stability, Masha stressed that the fundamental issue lies in improving overall productivity in the agriculture sector. He highlighted the low average productivity levels in the country compared to similar developing nations, attributing this disparity to a lack of access to working capital for farmers. Masha underscored the critical role of finance in enabling farmers to purchase quality inputs and adopt modern agricultural practices that can drive productivity growth. He expressed concern over the limited access to commercial lending in the agriculture sector, citing the low percentage of GDP allocated to agricultural financing. The conversation also touched upon the government's efforts to address the financing gap in the sector. Masha acknowledged the government's initiatives to inject capital into agriculture but noted that more innovative solutions were needed to attract private sector investment. He emphasized the massive financing requirement of $85 billion to support small-scale farmers in Nigeria and called for leveraging the government's balance sheet to mobilize additional capital. Despite the liquidity challenges facing the private sector, Masha highlighted the importance of overcoming perceived risks and exploring new avenues for catalyzing investment in agriculture. He highlighted the role of foreign direct investment in financing smallholder farmers and underscored the need for continued efforts to attract capital to the sector. As Nigeria approaches the festive season, Masha cautioned that food prices may continue to rise due to increased demand during the harvest period. He acknowledged the potential challenges ahead but remained hopeful that strategic investments and policy interventions could help mitigate the impact on consumers. In conclusion, the conversation underscored the urgent need for increased investment in agriculture to boost productivity, stabilize food prices, and ensure food security for all Nigerians.