- Government must arrest the rising cost of ingredients
From the Premium Breadmakers Association of Nigeria (PBMN) came what could rightly pass for an alarm bell of an impending bread crisis. According to the association’s president, Mr Tosan Jemide, its members are worried that the continued rise in the cost of production materials of bread may lead to the extinction of the industry and the concomitant erasure of about 700, 000 direct and indirect jobs. As a matter of fact, some members of the association, according to Jemide, have started closing shop as they can no longer cope with the rising costs, after investing heavily in the business.
It does not matter if the number of jobs said to be under threat in the industry is over-bloated or understated. The issue is that unemployment rate is already on the high side in the country and we need to do everything humanly possible to prevent further job losses, especially if the economic environment is too harsh to allow for job creation at the speed that we would have wanted.
Flour, the major ingredient of the bakers, has been witnessing phenomenal price increases in the last three years. Jemide painted the picture clearly: “Between 2015 and now, the price of flour which is our major ingredient has increased from N6,500 per kilogram to N11,500 per bag with the possibility of further increase.” He added: “In the last three years, the prices of flour, sugar and other baking ingredients have quintupled without a corresponding increase in the prices of premium bread by PBAN members …”
We agree with PBAN that this really calls for serious concern. What with loans running into double digit interests which the bakers got to finance their businesses, and which many of them are now finding difficult to repay. What with the energy conundrum which the bakers, like most other investors in Nigeria are suffering from. Again, hear Jemide: “Almost all our baking machines are powered by diesel generators and the high cost of the commodity has led to the closure of some premium bakeries.”
Then the July 12, 2012, 15 percent levy on wheat grain import by the Federal Government which drove up the price of wheat. When the levy was introduced, the government, according to PBAN, said it was meant to promote wheat cultivation locally. Just like many such government promises, the effects are yet to materialise, six years after.
The Federal Government must come to the aid of the bread makers. As the association said, this could start with the reduction of the 15 percent levy which drove the duty on wheat from five per cent to 20 per cent. Since wheat constitutes about 75 percent of the baking ingredient, it is believed this would lead to a substantial reduction in the price of flour by millers, and ultimately reduction in the price of bread.
Bread, we must remember, has acquired significance as a global staple food, and its availability or non-availability, vis-a-vis its price, had led to protests and sometimes bloody riots in different parts of the world. It was one of the immediate causes of the French Revolution of 1789. High bread prices had led to riots in several African countries.
So, the government must be concerned when the cost of ingredients used in making bread continues to rise. Perhaps PBAN did not want to sound alarmist by not alluding directly to the dire consequences of the developments in their industry; hence, its saying that its members would soon be out of jobs when in fact it meant the government should come to the bakers’ aid in order to avert social and political unrests that may trail high bread prices.
