Nigerians are being urged to prepare themselves for an Upcoming rise in the Prices of Bread, a staple food item for the majority of the Population.
The Increase is attributed to the withdrawal of Fuel Subsidies and the liberalization of the Foreign Exchange (forex) Market by the Federal Government.
The President of the Premium Breadmakers Association of Nigeria (PBAN), Engr. Emmanuel Onuorah, expressed his thoughts on the matter, Stating that the Situation evokes a sense of déjà vu with mixed feelings.
Onuorah highlighted the Import dependency of many Baking Ingredients, including Flour made from wheat, Ascorbic Acid, Calcium Propionate, Yeast, and Bread Softener.
The floating of Forex has resulted in higher clearing Costs for these Ingredients, thus leading to an Inevitable Increase in Bread Prices.
Furthermore, Onuorah revealed that flour Millers even considered leveraging the Forex floating as an excuse to raise the Price of Wheat Flour.
Such an increase would significantly Impact the Price of Bread, as the additional Costs would be passed on to Consumers.
Consequently, this Price hike would likely result in Decreased Sales and the closure of more Bakeries.
Regarding the removal of the Fuel Subsidy, Onuorah Criticized the decision, asserting that it lacked a well-defined plan to mitigate its adverse effects on Businesses and Nigerians.
The Policy’s Implementation seemed rushed, without proper consideration of the Consequences.
The Impact on Onuorah’s association was Immediate, as their Workers faced difficulties affording the exorbitant Transportation fares, hindering Production due to a shortage of available Workers.
Delivery vans, used by both the Association and Distributors, experienced Increased Fuel Costs, which subsequently led to higher Production expenses and reduced Profit Margins.
Moreover, the Imposition of a 7.5% value-added tax (VAT) on Diesel by the new Government further exacerbated the situation, causing an Immediate Price surge and negatively Impacting Production and Sales.
In summary, the Increased Prices of Bread in Nigeria can be attributed to the withdrawal of Fuel Subsidies and the liberalization of the Forex Market.
These factors have raised the Costs of Production for Baking Ingredients and Transportation, leading to a potential decline in Sales and the closure of Bakeries.
The hasty Implementation of these Policies without proper Measures to mitigate their effects has further compounded the Challenges faced by the Breadmaking Industry.
