The Lagos Chamber of Commerce and Industry (LCCI) has said the recent announcement regarding the federal government's intention to establish a National Commodity Board has the potential to bring stability to food prices in Nigeria.
The director-general of LCCI, Dr. Chinyere Almona stated that, "this initiative comes at a critical juncture when the rising cost of food has become a pressing concern for both the government and citizens, where food inflation has reached an alarming level, as highlighted by the National Bureau of Statistics data placing Nigeria's food inflation at 33.9 per cent as at January 15, 2024."
She explained that the proposed commodity board has the potential to bring stability to food prices by continually assessing and regulating them, saying, this could alleviate the burden on consumers and enhance overall economic predictability and the creation of a strategic food reserve for stabilising prices of crucial grains and other food items is a positive step toward ensuring food security and mitigating the impact of supply chain disruptions.
According to Almona, the chamber views this initiative as the government's commitment to implementing effective short-term strategies to counteract subsidy removal and ensure immediate food supply and to deploying concessionary capital from the Central Bank of Nigeria(CBN) to the agricultural sector, especially, toward fertilisers, processing, mechanisation, and other key aspects, as a positive move that can enhance the overall productivity of the agricultural value chain.
However, LCCI observed that, "the price regulation may address immediate concerns, but there is a risk of market distortion if not implemented carefully.
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"Over-regulation may discourage private sector participation and hinder market dynamics which is against business community growth. More so, this plan may largely involve complex logistics that will require robust systems and processes to ensure the board's effectiveness without bureaucratic bottlenecks."
Considering this development, the Chamber offered its insights and recommendations on the best strategies the federal government should adopt for the successful implementation of the National Commodity Board.
LCCI DG emphasised the importance of a comprehensive approach that combines short-term interventions with medium-term strategies to ensure sustained and effective results.
The Chamber recommended among other things the distribution of fertilisers and grains to farmers and households should be prioritised to counteract the immediate effects of subsidy removal on food prices.
"Foster collaboration between the ministries of agriculture and water resources to ensure efficient farmland irrigation, promote year-round food production, and reduce dependence on seasonal variations; expedite the establishment of the National Commodity Board to assess and regulate food prices; and actively engage the youth population by making agriculture an attractive and viable option," it stressed.
She added that it is imperative that the private sector, including farmers and other stakeholders, is actively involved in the decision-making processes and implementation of the commodity board to ensure inclusivity and effectiveness.
She noted that the rising cost of food is a critical issue that requires immediate attention and sustained effort.
