Chart of the Week: Nigerian consumers opt for cheaper alternatives as food prices rise

Inflation disproportionately affects lower-income earners in Nigeria’s consumer market, with some spending up to 40% of their monthly income on rice, Nigeria’s second most consumed staple. For context, Nigeria is estimated to consume roughly $4 billion worth of rice annually.

Nigeria's February 2024 inflation rate was 31.7%; however, food inflation was at 37.92%, both at nearly a three-decade high. Focusing on rice specifically, the price of a kilogram has increased by 300% within the past year compared to other staples, including legumes and meat, which have increased by an average of 100% year-on-year. 

Over 30% of rice consumed in Nigeria, approximately 2 million metric tonnes, is imported. Unsurprisingly, the naira’s depreciation from ₦463/$ to ₦1,572/$ in the last year has significantly increased import costs and due to lingering structural bottlenecks, local rice producers cannot meet the country’s annual 7 million metric tonne rice demand, leading to a spike in prices