Nigeria’s Wheat Value Chain’s Growing Importance to Job Creation, Food Security

The wheat value chain continues to play key roles in providing employments for the active segment of the population while strengthening the nation’s food security position.

The jobs and the affordable meals that are being delivered to the local markets through the bold developmental actions pursued by the local wheat millers couldn’t have come at a better time as Nigeria’s unemployment situation and inflationary trends grow agonizingly worse.

Data released by the National Bureau of Statistics (NBS) indicates that unemployment, underemployment and youth unemployment/ underemployment, reached 33.3 %, 22.8 %, 42.5% respectively in the 4th quarter of 2020 in the country.

Meanwhile, the increasing dietary shift to more affordable wheat derivative foods such as bread, semolina, pasta and noodles has led to expanded production, processing, warehousing, distribution/ logistics, fleet management, last-mile and retailing activities in the wheat value chain, consequently lifting the employment generating capacity of the value chain from 10 million to 12 million.

Coming at such a crucial time when the impact of the COVID-19 pandemic incessantly weakens the economic contributory latency of other sectors, the robust activities being generated along the wheat value chain are a rare lift for Nigerian households.

The wheat value chain does not only provide jobs for the population, it also ensures the population has consistent access to affordable quality foods.

In the past year, the prices of Rice, Garri, millet and Beans, which are notable national staples, have risen sharply by 21.1%, 114.1%, 57.2% and 66.6%, respectively, while the prices of wheat derivative foods have been largely cushioned from the adverse inflationary trend by local millers.

The flour milling companies, under the aegis of the Flour Milling Association of Nigeria (FMAN), and the bakers, intentionally absorb the extra cost of production occasioned by the tough operating environment, in order to keep feeding the population.

Take for instance bread, a widely consumed staple food produced from wheat. The wheat millers continue to ensure that while other food commodities increased in price by 50% and more in the past year, bread is shielded from such debilitating trend, increasing by just 28.5% and the average daily production output of 10 million loaves is maintained. To this end, bread has traditionally become the cheapest carbohydrate option available for Nigerians.

The availability of quality flour brands at competitive prices helps the bakers to maintain production level, forgo downsizing and help meet customers demands, despite the adverse effects of the COVID-19 outbreak. Bakers, therefore, understand the importance of the millers’ intervention efforts.

How did the flour millers achieve such an important economic balancing act? The flour millers intentionally track commodity prices in the carbohydrate food staple space to keep the price of inputs for bread production competitive. The same goes for every other wheat derivative food such as semolina, noodles and pasta, which the flour millers intentionally ensure are kept within affordable price boundaries of the consumers.

A global consulting firm, KPMG, attests to the important roles played by flour millers in feeding a national population that has over the years been priced out of the other staple foods due to continuous food price inflation, a spike in unemployment rate and a declining income level.

In a report themed ‘Wheat-based consumer foods in Nigeria’, KPMG underscored the fact that the flour milling businesses that operate in Nigeria have been a source of “low-cost convenient staple and baked foods” for the teeming population.

This also explains why 45% of the food variants served in Nigerian homes are produced from wheat. As more foods are being served to nourish, sustain and strengthen the Nigerian populace, by direct correlation, more jobs are also being created by the wheat millers and the wheat value chain.

Speaking on the employment-generating and food security roles played by the wheat value chain, Mr Ashish Pande, Managing Director of Crown Flour Mill (CFM) Limited, a subsidiary of Olam, an agribusiness conglomerate, said: “Presently, the wheat value chain accounts for over 10.5 million jobs generated annually in Nigeria. This of course has placed the wheat value chain at the centre of the various economic development agenda of the Federal Government of Nigeria.”

To reiterate the nutritional and economic contributions of flour millers, Ashish expatiated further, “Presently, the wheat value chain adds N2.3 trillion to Nigeria’s GDP annually, being the average yearly spend on wheat derivative foodstuffs; and accounts for 75 million of the daily food portions in Nigerian households.”

He said, “To scale up its contributions, the milling association continues to invest N500 million annually in seed trials, research, training of smallholder wheat farmers and reimbursing the various farming research institutes in the country to ensure that the current local production levels of wheat improve significantly. While these efforts have ensured that we keep providing affordable and quality food for the growing Nigeria population, it has also deepened the rate of jobs generated for the young and active of the population.”

Similarly, Professor Adetunji Kehinde, provost of the College of Agriculture, University of Osun, provided an insight into the robust activities that keep turning out the impressive job creation rates in the wheat value chain.

He said, “Like other agro-products, the wheat value chain has created and is still creating employment at the pre-production (procurement of loan for land, labour, and training), production (seed procurement to field management till harvesting time), harvest (methods, tools, labour, and transport) and postharvest (handling, storage, processing, and milling), preservation, packaging, distribution and marketing levels. The wheat milling industry is one of the most important drivers of employment in the food sector.”

Considering the contributory role that the wheat value chain plays in employment generation and food security, all hands must be on deck to support flour millers, in their current efforts to strengthen the all-important value chain.

Formulating and implementing a developmental agro and financing policy framework that would ensure that flour millers continue to access wheat would help maintain the key roles of providing affordable staple foods and employment for the Nigerian population. This should be the focus of the Federal Government and relevant agencies and key stakeholders, especially at this challenging period.