Economy
Drought Pushing Food Prices up Sharply in East Africa
By Dipo Olowookere
Drought throughout East Africa has sharply curbed harvests and pushed the prices of cereals and other staple foods to unusually high levels, posing a heavy burden to households and special risks for pastoralists in the region.
Local prices of maize, sorghum and other cereals are near or at record levels in swathes of Ethiopia, Kenya, Somalia, South Sudan, Uganda and the United Republic of Tanzania, according to the latest Food Price Monitoring and Analysis Bulletin (FPMA).
Inadequate rainfall in most areas of the sub-region has put enormous strain on livestock and their keepers. Poor livestock body conditions due to pasture and water shortages and forcible culls mean animals command lower prices, leaving pastoralists with even less income to purchase basic foodstuffs.
“Sharply increasing prices are severely constraining food access for large numbers of households with alarming consequences in terms of food insecurity,” said Mario Zappacosta, FAO senior economist and coordinator of the Global Information and Early Warning System.
The trends in East Africa, where prices of staple cereals have doubled in some town markets, stand in marked contrast to the stable trend of FAO’s Food Price Index, which measures the monthly change in international prices of a basket of traded food commodities.
The difference is due to the drought that is hammering the sub-region, where food stocks were already depleted by the strong El Niño weather event that ended only last year. Poor and erratic rainfall in recent months, crucial for local growing seasons, are denting farm output.
Somalia’s maize and sorghum harvests are estimated to be 75 percent down from their usual level, and some 6.2 million people, more than half of the country’s total population, now face acute food insecurity, with the majority of those most affected living in rural areas.
Soaring prices
The FPMA Bulletin tracks food price trends on a granular level and in local terms, with an eye to flagging instances where the prices of essential food commodities increase sharply or are abnormally high.
In Mogadishu, prices of maize increased by 23 percent in January, and. the increase was even sharper in the main maize producing region of Lower Shabelle. Overall, in key market towns of central and southern Somalia, coarse grain prices in January have doubled from a year earlier.With an earlier than usual depletion of household stocks during the coming lean season and preliminary weather forecasts raising concerns for the performance of the next rainy season, prices are likely to further escalate in the coming months.
Maize prices in Arusha, United Republic of Tanzania, have almost doubled since early 2016, while they are 25 percent higher than 12 months earlier in the country’s largest city, Dar Es Salaam.
In South Sudan, food prices are now two to four times above their levels of a year earlier, exacerbated by ongoing insecurity and the significant depreciation of the local currency.
In Kenya, where eastern and coastal lowlands as well as some western areas of the Rift Valley all suffered below-average rainfall, maize prices are up by around 30 percent, with the increase somewhat contained somewhat thanks to sustained imports from Uganda.
Cereal prices aren’t the only ones rising. Beans now cost 40 percent more in Kenya than a year earlier, while in Uganda – where maize prices are now up to 75 percent higher than a year earlier – and increasing around the key border trading hub of Busia, the prices of beans and cassava flour are both about 25 percent higher than a year ago in the capital city, Kampala.
Double jeopardy for pastoralists
Drought-affected pastoral areas in the region face even harsher conditions.
In Somalia, goat prices are up to 60 percent lower than a year ago, while in pastoralist areas of Kenya the prices of goats declined by up to 30 percent over the last twelve months.
Shortages of pasture and water caused livestock deaths and reduced body mass, prompting herders to sell animals while they can, as is also occurring in drought-wracked southern Ethiopia. This also pushes up the prices of milk, which is, for instance, up 40 percent on the year in Somalia’s Gedo region.
Lower income from livestock collides with higher prices for cereals and other staple foods in a wrenching shock to terms of trade for pastoralist households. A medium-sized goat in Somalia’s Buale market was worth 114 kilograms of maize in January 2016, but at today’s prices can be traded for only 30 kilograms of the grain.
FAO uses its proprietary FPMA Tool, accessible to the public online, to monitor local markets and gather data for more than 1350 domestic price series in 91 countries around the globe in order to produce its Indicator of Food Price Anomalies.
By Dipo Olowookere
About $197.71 million has been injected into the foreign exchange (FX) market by the Central Bank of Nigeria (CBN) to boost liquidity.
This intervention by the apex bank is expected to strengthen the Naira in the different segments of the forex market after coming under pressure in the past few days as a result of the new import tariffs imposed on countries, including Nigeria, by the President of the United States, Mr Donald Trump.
Business Post reports that on Friday, the Naira depreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 1.45 per cent or N22.49 to settle at N1,573.23/$1 versus Thursday’s exchange rate of N1,550.74/$1, and in the parallel market, it lost N10 to sell for N1,570/$1 compared with the N1,560/$1 it was transacted a day earlier.
To ease the pressure on the domestic currency, the central bank sold fresh $197.71 million to authorised FX traders between Thursday and Friday.
“The Central Bank of Nigeria (CBN) has noted recent movements in the foreign exchange market between April 3 and 4, 2025, reflecting broader global macroeconomic shifts currently affecting several emerging markets and developing economies.
“These developments were as a result of the recent announcement of new import tariffs by the United States government on imports from several economies, which has triggered a period of adjustment across global markets.
“Crude oil prices have also weakened – declining by over 12% to approximately $65.50 per barrel – presenting new dynamics for oil-exporting countries such as Nigeria.
“In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, with the provision of $197.71 million through sales to authorised dealers.
“This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market.
“The CBN continues to monitor global and domestic market conditions and remains confident in the resilience of Nigeria’s foreign exchange framework, which is designed to adjust appropriately to evolving fundamentals.
“All authorised dealers are reminded to adhere strictly to the principles outlined in the Nigeria FX Market Code and to uphold the highest standards in their dealings with clients and market counterparties,” a notice from the Director of Financial Markets Department at the CBN, Ms Omolara Omotunde Duke, said.
By Dipo Olowookere
The Debt Management Office (DMO) has revealed that the total public debt stock of Nigeria increased by 48.58 per cent or N47.32 trillion to N144.67 trillion ($94.23 billion) as of December 31, 2024, from N97.34 trillion ($108.23 billion) in the preceding year.
In a report released on Friday, the agency disclosed that the rise in the domestic and foreign debts was due to the borrowing of funds by the government in the period under review.
Business Post reports that external debt of the total debt accounted for 48.59 per cent at N70.29 trillion ($45.78 billion), while the domestic component was 51.41 per cent at N74.38 trillion ($48.45 billion).
A breakdown showed that for the total foreign borrowings, the federal government accounted for 43.49 per cent at N62.92 trillion ($40.98 billion), while the 36 states of the federation and the Federal Capital Territory (FCT) accounted for 5.10 per cent at N7.37 trillion ($4.80 billion).
As for the domestic debt, the federal government contributed 48.67 per cent at (N70.41 trillion ($45.86 billion) and the states and the FCT contributed 2.74 per cent at N3.97 trillion ($2.59 billion).
Analysis showed that in 2023, the external debt was N38.22 trillion ($42.50 billion) before rising in one year by 83.89 per cent to N70.29 trillion ($45.78 billion) in December 2024, while the local debt stood at N59.12 trillion ($65.73 billion) as of December 2023 before jumping by 25.77 per cent in 12 months to N74.38 trillion ($48.44 billion).
Since the current administration of Mr Bola Tinubu assumed office on May 29, 2023, it has sourced funds from local and external sources through treasury bills, Naira-denominated and Dollar-denominated bonds to finance its budget deficits.
However, much has been done to cut down Nigeria’s revenue-to-debt service ratio to 65 per cent from 97 per cent, according to Mr Tinubu in November 2024.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited ended Friday’s trading session lower with a marginal decline of 0.01 per cent as a result of continued market volatility.
Customs Street was down during the last trading session of the week despite bargain-hunting activities in the banking and industrial goods sectors, which closed higher by 0.51 per cent and 0.01 per cent, respectively.
Business Post reports that profit-taking in the other sectors contributed to the downfall of the local bourse yesterday, with the insurance index weakening by 3.21 per cent.
Further, the energy counter went down by 0.50 per cent, and the consumer goods space depreciated by 0.24 per cent, while the commodity industry closed flat.
At the close of business, the All-Share Index (ASI) shrank by 13.37 points to 105,511.89 points from 105,525.26 points and the market capitalisation declined by N8 billion to settle at N66.147 trillion versus Thursday’s closing value of N66.155 trillion.
A total of 348.3 million shares worth N8.1 billion exchanged hands in 11,444 deals on Friday compared with the 397.1 million shares valued at N8.7 billion traded in 13,667 deals a day earlier, implying a drop in the trading volume, value, and number of deals by 12.29 per cent, 6.90 per cent, and 16.27 per cent, respectively.
The activity log was led by UBA with the sale of 26.3 million stocks for N972.3 million, United Capital traded 25.6 million shares valued at N391.5 million, FCMB exchanged 24.2 million equities worth N211.2 million, Zenith Bank transacted 22.9 million shares valued at N1.1 billion, and Fidelity Bank traded 22.6 million stocks worth N441.7 million.
Investor sentiment remained bearish yesterday after the NGX finished with 19 price gainers and 29 price losers, showing a negative market breadth index.
Lasaco Assurance and AXA Mansard were the worst-performing equities with a decline of 10.00 per cent each to sell for N2.34, and N8.64 apiece, May and Baker decreased by 8.72 per cent to N7.85, Guinea Insurance crashed by 8.70 per cent to 63 Kobo, and FTN Cocoa lost 6.43 per cent to end at N1.60.
However, Learn Africa and Livestock Feeds closed as the best-performing stocks after they gained 10.00 per cent each to quote at N3.30, and N7.92, respectively, VFD Group soared by 9.83 per cent to N57.00, Union Dicon expanded by 9.43 per cent to N5.80, and NGX Group rose by 8.17 per cent to N32.45.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN