Bread: Need For Affordability

Bread,  food made by baking dough made from cereals,  is an household name in Nigerians’ breakfast table.  Taken with  hot beverage, or sandwiched with fish stew, or the like, bread  has remained  the most common breakfast dish in most  Nigerian homes. It is cherished and paronized  by both adults and children, this takes  its consumption beyond the breakfast table to meet even  the lunch and supper needs of the people.  It is quick and easy to throw together.
One good thing about this all- cherished food is its ability to maintain an affordable, stable price over the years, an attribute that had endeared it the more to every home. Therefore,  given the place of bread in  homes’  menu, there is no doubt that  any decision taken on it will affect  the generality of Nigerian homes and even beyond.
Last week, to the chagrin of   Nigerians,  bakers in Nigeria   embarked on a withdrawal of services for four days. Basically, the move was aimed at drawing the  attention of both the federal government, as well as the public to the crises in the industry. In addition,  the National Association of Master Bakers and Caterers of Nigeria (AMBCN) said  it was to  ensure the survival of the bread industry in Nigeria. The National Secretary of the Association,  Jude Okafor,  explained that high production cost forced the bakers to close shop, as Onuorah, a baker,  declared that the bakeries’ capacity has dropped to 70 percent, adding that they can no longer have the turnover required to be able to break even and some are closing down. “In my bakery, I used to have 150 staff, today I have only 45, because my output  has dropped. I was doing three shifts in 24 hours before, now I am doing 12 hours.” “It has been very tough with us as businesses. We take loans from banks and default on repayments. But bankers are not willing to give us any lifeline any longer. That is why we want the federal government to look at our side.
Beyond the closing of shops for four days,  came an increase in the price of bread, a situation that has sent  jitters into the spines of many homes.  Recall that about this same time last year, October precisely,  Olufunmilola Olukomaiya, an acknowledged journalist, raised alarm on the rising cost of bread in the Nigerian market as it was gradually becoming an exclusive preserve of the rich.  A loaf of bread earlier sold for N500  within the period under review, sold for N700 while the ones  for N200, were sold for N300. Amidst reactions to this development,  bread sellers insisted that the high cost of raw materials necessitated the increase. Nigerians across the nations  complained bitterly about the high prices of bread.
Then, the Chairman of  the Association of Master Bakers and Caterers of Nigeria (AMBCN), Abuja chapter, Mr Ishaq Abdulkareem,  said that the 30 per cent increase in the price of bread was to avoid the shutdown of bakeries caused by the cost of ingredients and production. Abdulkareem stated that the prices of all ingredients used for baking were too high, especially flour and sugar. “The cost of business registration is on the high side,  before now, the cost of registration was N32,500 but today it is N90,000” he said. Although the increases were  hinged on increase in prices of raw materials, insecurity  still stands out as a prominent factor which has given room to the attendant high cost of raw materials ocassioned by their inavailability, and  by extension, the exchange rate of the Naira to the dollar.  There were also insinuations that  double taxation by the authorities as well as the high cost of purchasing diesel were also contributory.
Today, while the people yet grappled  with the prevailing market realities,   the same big loaf of bread that seemed to have settled for #700-800 for the past one year, now goes for a whooping sum of #1,000 only. Friday, a bread seller, said  if the old price must stay, the manufacturers would run at a loss. And for Mrs Maria Cardillo, the Chief Executive Officer, Bon Bread, there was the need for an increase in the price of bread to avoid the collapse of the business. She said the price of bread needed to be increased because “we have had an increase in prices of raw materials and we don’t have alternatives.” Again, the people reacted, but what could their reaction birth?
Surprisingly,  bakers are not even swayed by public outcry, they have resolved to take the courage to do this and ignore the fear of the unknown. According to the bakers leader, “All of us have strategies to keep customers to our sides but let not your price strategy bite you back; there are other things to give your customer to stay with you like giving them incentives.” The Secretary said: “We regret these hikes in prices, it is due to the economic indicators and we hope this does not stay for too long. However, these prices are valid for as long as the cost of input materials remain stable,” he said.
Yinka Kolawole & Providence Ayanfeoluwa, writing for the Vanguard Newspaper,  revealed that Prices increased by 50% this year, out of which,  25% was witnessed last month. According to them, Available data has shown that Nigeria imported about 99 percent of its wheat requirement in the first quarter of 2022 (Q1’22), and with the attendant foreign exchange (forex) demand pressure, this has been fingered as one of the major factors responsible for the ongoing bread crisis in Nigeria. Report also shows  that bakers and other confectionary industry operators have marked up their product prices about four times this year. As at last week the series of price mark ups have seen the average retail price of bread go up by as much as 50 percent this year.For how long this intermittent increase in the price of bread will continue, has remained a puzzle  many Nigerians are yet to solve
The Federal Ministry of Agriculture and Rural Development estimated Nigeria’s national wheat requirement at 5 million metric tons, and the National Bureau of Statistics (NBS) reported that the country produced only 36,943 metric tons of wheat in 2021, representing less than one percent of the country’s total annual demand. According to NBS, wheat was Nigeria’s second most imported goods in Q1’22,  accounting for N258.3 billion of the value of total imports in the period. A 50kg bag of flour now goes for about N30,000 as against N12,600 in January 2021, representing an increase of 138 percent. Onuorah corroborated this. He said “In bread making, our inputs are 100 percent imported because the wheat flour that we use majorly comes from Russia. It is not us but the millers because we don’t deal with wheat, we deal with their finished product. And from what we got from them, they are getting most of the wheat from Russia, Ukraine and some part of Argentina”..
From the given analysis, it is obvious that  the huge differential between import and in-country growing in the nation’s wheat requirement, can only be bridged by importation and the  foreign exchange (forex) needed to prosecute that  can only be imagined.  Who knows if the government has any provision for forex concessions. Definitely, the danger in  sourcing from the parallel market outside the government’ s window,  is the possibility for  exorbitant rate. Unfortunately, bakers in addition,  still complain of   a levy they call 15 percent wheat development levy. This levy, said to have been  initiated by the Jonathan’s administration, was supposed to be a stop- gap measure for two years.
Onuorah maintained that the essence of this 15 percent wheat development levy was to help grow wheat in the country, but revealed that.”Apart from that, the government also puts 15 percent duty on wheat import”. Cumulatively, what they are seeing as wheat import duty is 30 percent, which makes it a a problem compounded by the abnormal rise in the price of diesel. Eventually, what one  sees  is a  spiraling costs of production. According to reports, currently, “flour is going for between N29,000 and N30,000,  the same thing with sugar, softener, and egg that used to go for N800 per crate,  is now N2,200 depending on the size, smaller size is N2,000. Yeast that was between N5,000 and N7,000  is now N21,000,  the Calcium Sulfate of  N29,000  is now about N54,000, and the list goes on.”
Listening to bakers relate their contention with regulatory agencies, NAFDAC and SON , including touts too who allegedly go  to bakeries to disturb,  breaking bakeries’ vehicles windscreen and side mirrors when the drivers decline their requests, you will conclude that  it  is  indeed a mixed bag for  the bakers. But for how long will this trend last.?  If a levy is instituted for a certain purpose, which has a time frame, would it not be proper for such initiative to be evaluated within the confine of the given time? From former President Goodluck Jonathan’s administration which birthed the ‘wheat development levy’,  to seven years into President Buhari’s administration, it is questionable to have such levy still running unguarded. If the aim was to help grow wheat in the country,  then there is the need to evaluate the initiative with a view to ascertaining the extent of progress made in that regard. A review of that levy is eminent
Again, bakers have registered their dislike over N154,000 penalty  charged to bakeries on late renewal of certificates by NAFDAC. While no sane person would encourage any investor towards late renewal of business documents, it is important authorities take into consideration  the hitches before investors that lead to delay in renewal of statutory business documents. The said N154,000 penalty  charge on  bakeries on late renewal of certificates by NAFDAC,  will eventually be borne by the consumers. Thus NAFDAC may need to reconsider alternative measure of penalty or better still, make a downward review of the existing sum.
Bakeries as are obtainable in Nigeria, fall under Micro  Small and Medium Enterprises (MSMEs), having multiple taxation in the form of every agency coming to regulate, will only bloat their cost of production.  For serving the need of the common man, let’s make bread accessible by making it affordable.

By: Sylvia ThankGod-Amadi