Nigeria’s food crisis: Niger State moves to enact price control law

The government of Niger State is making strides toward curbing food inflation by considering the implementation of a price control law, with a bill for a Price Control Board passing its first reading in the state.

The bill, presented during a recent plenary session, marks a proactive step towards alleviating the economic burdens faced by Nigerians, particularly in light of the escalating food inflation plaguing the nation.

This initiative follows a recent ruling by a high court in Lagos, mandating the federal government to regulate the prices of essential goods and services nationwide within seven days.

Sponsored by ISA Etsugaie (APC-Agaie), the bill aims to tackle the pressing issue of rising food prices, exacerbated by external factors such as insecurity and climate change. Niger State currently grapples with a food inflation rate of 29.43% year-on-year, slightly lower than the national average of 33.93% as of December 2023, according to the National Bureau of Statistics.

Etsugaie outlined the objectives of the proposed Price Control Board, emphasizing its role in monitoring price fluctuations, analyzing them in relation to economic factors, and overseeing the distribution of essential goods. The board, if established, would maintain continuous surveillance over prices, interpret market movements, and correlate them with broader developments in the state’s economy.

Following its presentation during plenary, the bill was adopted by the House and passed through the first reading, signaling initial legislative support for the measure. However, concerns have emerged regarding the potential impact of price controls on local farmers, who already face challenges due to insecurity and economic instability.

Nigeria’s soaring 33.93% food inflation has prompted the federal government to declare a state of emergency on food security. Mohammed Idris, the minister of information, announced measures including the opening of National Food Reserves to stabilize prices. Additionally, human rights lawyer Femi Falana, SAN, has taken legal action against the government over rising food prices, culminating in the recent court order to regulate prices within seven days.

The move by Niger State comes shortly after Governor Mohammed Bago imposed a ban on wholesale food purchases by traders from neighboring states, attributing price hikes to the influx of external traders exacerbating scarcity. While intended to protect local markets, economists warn that price controls may worsen the situation, potentially driving farmers and vendors out of business.

In analyzing the implications of price controls, economists also caution against unintended consequences, including market distortions and reduced incentives for agricultural production. Price ceilings could lead to shortages and black market activity, undermining the objectives of ensuring affordability and accessibility of essential goods.

Moreover, the effectiveness of price controls in addressing root causes of inflation, such as the high cost of the food supply chain and economic instability, remains uncertain. Sustainable solutions may require comprehensive strategies addressing issues like inflation, agricultural investment, insecurity, and policy reforms to foster a conducive business environment.

Analysts said achieving sustainable economic growth and addressing inflationary pressures necessitates holistic approaches that address underlying structural challenges while mitigating short-term risks.

While the Price Control Board holds promise as a mechanism for price stabilization, its success will hinge on collaborative efforts with stakeholders across the agricultural value chain.

Niger State has been urged to pave the way towards a more resilient and equitable food economy by fostering a conducive environment for sustainable agricultural production and market access.