Naira depreciation heightens food insecurity, malnutrition —Report •As naira extends depreciation to N397 at parallel market

Restricted access to parts of the Northeast contribute to Emergency food insecurity

Recent decision of the Central Bank of Nigeria (CBN) to float the naira against the US dollar and other international convertible currencies will likely lead to further depreciation of the naira, escalate inflation and result in food insecurity in Nigeria particularly the north east, a report on Nigeria: Food Security Outlook – June 2016 to January 2017 has warned.

In the report published on the Reliefweb by the Famine Early Warning Security Network, inflation rate increased from 13.7 percent to 15.6 percent between April and May and further worsened in June hitting 16.5 percent.

“Consequently, prices of local and imported staples such as rice, millet, maize and sorghum will continue to rise beyond normal levels, limiting purchasing power and food access through the lean season period until harvests in October.”

It said conflict in Northeast Nigeria has left a significant portion of the population without access to adequate food, water, and health services.

A “nutrition emergency” has been declared in Borno State by the Nigerian Ministry of Health and information from recent rapid assessments, although limited and not statistically representative, also raises the possibility that a Famine (IPC Phase 5) could be occurring in the worst affected and less accessible pockets of the state.”

According to the Network, Boko Haram conflict and atypically high staple food prices have substantially restricted food access for most households across large areas in the Lake Chad region.

“Diminishing community and humanitarian support, below average harvest stocks and restricted income earning opportunities will continue to limit food access in this region.

“Consequently, affected households will continue to have difficulties meeting their minimal food needs and will remain in Crisis (IPC Phase 3) or Stressed (IPC Phase 2) food insecurity, depending on the zone, through January 2017. Several LGAs with proportionally high IDP populations are expected to be in Emergency (IPC Phase 4) acute food insecurity”, it continued.

It observed however, that most households outside of the Northeast are engaging in normal income-generating activities, early green harvests as well as livestock and cash crop sales.

But “some market dependent poor households are unable to meet non-food needs as their food stocks diminish due to the depreciating naira, high food prices, flooding along major floodplains and low purchasing power.

“Most households will continue to face Minimal (IPC Phase 1) acute food insecurity, although some poor households will face Stressed (IPC Phase 2) through the end of the lean season.”

As maira extends depreciation to N397 at parallel market

Meanwhile, the naira on Friday suffered further loss against the dollar at the parallel market as it exchanged at N397 to  the U.S. currency,  from N394 it posted on Thursday, while it traded at N505 and N442 to the Pound Sterling and the Euro, respectively.

At the Bureau De Change (BDC) segment of the market, the currency closed at N395 at the trading, while to the Pound and Euro, it exchanged at N503 and N434, respectively.

However, it strengthened at the official interbank market as it exchanged at N316.55, from N347.13 posted on Thursday.

Traders at the market expressed hope that the local currency would rebound in the coming weeks as banks sell foreign exchange to BDCs.

“There is no liquidity” in the interbank foreign-exchange market, Kunle Ezun, an analyst at Ecobank Transnational Inc. in Lagos, said by phone. The central bank sold dollars on August 15 and 16 and will continue intervening, he said.