EXAMINATION OF THE EFFECT OF FOOD INFLATION ON HOUSEHOLD FOOD INSECURITY AMONG RESIDENTS IN APO, ABUJA.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Food is an essential necessity for every household as it is crucial for human survival. Therefore, ensuring its safety and availability should be a top concern for every government. In order for a country to achieve food security, it is necessary for the majority, if not all, of its population to consistently have the means to obtain enough food that is safe, nutritious, and aligns with their dietary preferences, in order to maintain an active and healthy lifestyle. Conversely, home food insecurity refers to the situation where individuals within a household do not have consistent and reliable means to obtain sufficient, safe, nutritious, and socially acceptable food that is necessary for maintaining good health and productivity (Usen, 2018). 

Food inflation has emerged as a significant global concern, with implications for economic growth and development.  Rising food costs have a negative impact on the ability of households to purchase goods, leading to a decrease in real income per person, particularly in developing nations (Abdulaziz, Rahim & Adamu, 2019).  The majority of households in many developing nations are impoverished, and they allocate a significant portion of their income towards essential food items. Consequently, they experience hardship as a result of escalating food inflation (Abdulaziz, et al., 2019).

The Food and Agriculture Organisation (FAO) has disclosed that 815 million individuals worldwide suffer from hunger.  According to the FAO (2017), the number of people living in extreme poverty increased from 6 percent in 2013 to 14 percent in 2017, resulting in an estimated 705 million individuals affected by rising food prices.  The increase in food inflation in Nigeria leads to economic instability and has the potential to deter investment, particularly in small enterprises that do not have access to credit facilities. This phenomenon gives rise to internal economic imbalances, resulting in elevated levels of poverty and a high cost of living within the nation (Bada et al., 2018). Unsurprisingly, Nigeria had a higher food price rate compared to other African countries such as Ghana and South Africa. It was also identified as one of the 41 low-income food deficit nations in the globe. This could be attributed to the excessive reliance on imported goods, resulting in a significant increase in food inflation within the country (World Bank [WB], 2018).

Food inflation occurs when there is a consistent and ongoing increase in the overall price of food items. Food inflation has significant ramifications for the food security of any nation (Shittu, 2020). Nigeria is confronted with the predicament of food inflation due to its heavy reliance on food imports. The high food costs in the global market have an equivalent impact on the domestic marketplace (Tosin, 2023). An examination of the National Bureau of Statistics' data on domestic food and non-food prices in Nigeria from 2013 to 2021 showed that food prices in Nigeria consistently increased over the long term. However, there were also short-term fluctuations with notable high and low points between mid-2013 and early 2021, which aligned with the fluctuations in global food staples (Solomon et al., 2023). In addition, Egwuma et al (2024) emphasised that there has been a significant increase in food costs, reaching double-digit percentages in recent years. The highest reported value, 20.32%, occurred in September 2023. 

Moreover, the prices of essential food items have risen as a result of the economic downturn in Nigeria (Shehu et al., 2024). The increase in poverty levels has been linked to the deteriorating situation of the economy, which is marked by a decrease in the availability of goods, higher fuel prices, an increase in electricity tariffs, and primarily the depreciation of the national currency, the naira (Asaha et al., 2024). Although Nigeria possesses ample human and material resources and has experienced growth in domestic food production from 2012 to 2015, a report from the Food and Agriculture Organisation indicates that 7.1 million Nigerians are currently experiencing severe food insecurity (Emeka et al., 2017). Nwankpa (2024) asserted that the ongoing economic hardship in Nigeria, along with hyperinflation, has led to a rise in both hunger and malnutrition. The lower nutritional intake of many Nigerians, caused by rising food prices, has led to increases in the rate of malnutrition, leading in poor health status and increased vulnerability to diseases (Job, 2023). 

Food inflation is a significant problem that has a strong effect on urban households globally, especially in emerging nations such as Nigeria. Apo, a subdivision located inside the Abuja Municipal Area Council (AMAC), exemplifies the wider economic difficulties encountered by urban communities. Although it enjoys the advantages of being close to the administrative and economic hub of Abuja, a significant number of residents in this area encounter economic difficulties, such as escalating living expenses and food prices. The objective of this study is to investigate the correlation between increasing food costs and the occurrence of food insecurity among the inhabitants of Apo, Abuja.

1.2 Statement of the Problem

Food inflation has become a major problem in numerous urban regions, with considerable consequences for the ability of households to access and afford food. Within Apo, an emerging suburb in Abuja, Nigeria, escalating food costs are placing mounting strain on household finances, resulting in many manifestations of food insecurity. This situation is especially alarming considering the crucial role that sufficient and nourishing food plays in preserving the health and welfare of urban inhabitants.

Controlling food inflation/price is a goal for every government, however the fluctuation in exchange rates might impact food prices in Nigeria. In today's highly competitive global landscape, the exchange rate serves as a crucial indication that can decide the level of food prices and economic growth (Obi et al., 2018). For instance, the Nigeria Bureau of Statistics (NBS) has stated that the exchange rate has a significant influence on various macroeconomic factors, such as food inflation. This is because food has a relatively inelastic demand, meaning that changes in price have a limited impact on consumer behaviour. Additionally, the exchange rate affects the flow of goods and capital within a country. These findings were reported by the NBS in 2018 and corroborated by Abdulaziz et al. in 2019.  Furthermore, an unpredictable fluctuation in the exchange rate can exert significant pressure on a nation's balance of payments and food costs. This factor has a pivotal role in influencing the distribution of production and expenditure between items produced domestically and those produced abroad in the economy (WB, 2018; Obi et al., 2019). The volatility in the exchange rate further intensifies speculation due to the country's dependence on imported goods, which compete with locally produced items (Adetiloye & Kehinde, 2020).

Nairametrics previously stated that the rural unemployment rate increased to 4.0% in the third quarter of 2023, which is a significant rise from the 2.5% recorded in the previous quarter (Nairametrics, 2024). The rapid 60% surge over a span of three months underscores a burgeoning dilemma, wherein the lack of security in agricultural areas is a major factor in the rise of unemployment. In addition to contributing to unemployment, the consistently unstable security situation in the northern states of Nigeria has significantly impeded food production, resulting in a concerning increase in hunger and exacerbating food inflation (Premium times, 2024). The Lagos Commodities and Futures Exchange (LCFE) has recently observed that the Nigerian economy is currently facing a food crisis characterized by rapidly increasing food prices, rising transportation costs, insecurity, inadequate infrastructure, and instability in foreign exchange rates (LCFE, 2024). Therefore, the necessity for this investigation arises.

Objectives of the study

The primary objective of this study is to critically assess the effect of food inflation on household food insecurity among residents in Apo, Abuja. Specific objectives of this study are to:

To assess the extent of food inflation in Apo, Abuja.

To analyse the impact of rising food prices on household food security.

To examine the nutritional and health implications of food insecurity caused by food inflation.

To provide strategic interventions to address food insecurity and support affected households.

1.4 Research Questions

The following research questions which are in line with the objectives of this study will be answered in this study:

What is the extent of food inflation in Apo, Abuja?

What is the impact of rising food prices on household food security?

What are the nutritional and health implications of food insecurity caused by food inflation?

What are the strategic interventions to address food insecurity and support affected households?

1.5 Research Hypotheses

To determine the effectiveness of this study, the following research null hypotheses will be formulated to guide the study and it will be tested at 0.05% levels of significance.:

Ho: The extent of food inflation in Apo, Abuja is low

Ha: The extent of food inflation in Apo, Abuja is high.

1.6 Significance of the study

The study centers on a pivotal issue that has a substantial influence on the well-being and advancement of Nigeria. This study will set a crucial benchmark for the agricultural sector of Nigeria, as well as for policymakers and the government. Moreover, it will elevate the general quality of life for Nigerians.

The study will be highly significant for the agriculture sector as it will assist in devising strategies to augment agricultural productivity, which is crucial for ensuring economic stability and fostering growth. Improved food security can lead to economic benefits by reducing poverty and increasing labor productivity.

Furthermore, this study will provide government officials and policy makers with vital insights that help guide the formulation and implementation of effective food security programmes. Furthermore, it will furnish the administration with helpful observations regarding areas that want improvement or alteration.

Furthermore, the study seeks to enhance the quality of life for Nigerians. The study seeks to alleviate poverty by identifying and addressing the socio-economic elements that contribute to food inflation. This study's findings will further enhance social stability by reducing the probability of conflicts and societal unrest caused by food scarcity. 

Moreover, future academics will employ it as a comprehensive analysis of existing literature. As a result, other students who are interested in exploring this topic will have the opportunity to use this work as a source that may be analyzed and assessed. The study unequivocally improves the current academic knowledge regarding the impact of food inflation on household food insecurity among inhabitants in Apo, Abuja.

1.7 Scope of the study

Broadly, this study focuses to critically assess the effect of food inflation on household food insecurity among residents in Nigeria. Specifically, this study seeks to assess the extent of food inflation in Nigeria and analyse the impact of rising food prices on household food security. 

Further, this study will focus on examine the nutritional and health implications of food insecurity caused by food inflation, and it also seeks to provide strategic interventions to address food insecurity and support affected households.

1.8 Limitations of the study

As is common in all human endeavors, the researchers faced minor limitations when conducting the study. The main limitation was the lack of extensive literature on the subject, as there is limited data available for examination of the effect of food inflation on household food insecurity among residents in Nigeria. Consequently, a significant amount of time and effort was necessary to locate the appropriate materials, books, or information and to gather data. Additionally, this study is constrained by its small sample size and narrow geographical scope, focusing just on Nigeria. Consequently, the results of this study are not applicable for generalization, thereby leaving room for further research. 

Furthermore, the researcher faced a time constraint due to the need to do this research while also fulfilling the obligations of attending lectures and other educational activities.

1.9 Definition of terms

Food security: Food security is when a person is able to obtain a sufficient amount of healthy food on a day-to-day basis.

Food insecurity: Food insecurity is when a person cannot find adequate amounts of healthy food on a daily basis. Food security happens when a person does get the recommended amount of healthy food on a daily basis.

Food inflation: Food inflation occurs when there is a consistent and ongoing increase in the overall price of food items.