Why Do Nigerians spend so much on food?

The National Bureau of Statistics last week released a report on Consumer Expenditure.

It has been a while since the bureau released one, and I was curious as to what and what had changed. The last report was released sometime between 2009/2010.

The biggest item Nigerians spent money on in 2019, was food!! That’s no surprise actually.

Nigerians spent about N22.7 trillion on food in 2019. This amounts to 56.5 % of total household expenditure.

Simply put, the average Nigerian spends about 56.5% of their income on food in a year.

Even more surprising, is that folks living in rural areas spent more on food than those in urban areas.

Rural food spending amounted to N12.9 trillion in 2019. Urban food spending amounted to N9.8 trillion in 2019.

So why do we really spend so much on food?

Truth be told, it isn’t because we like food a lot.

Even though we do, a greater proportion of the country is quite poor.

The NBS last week released a report on poverty and inequality in Nigeria.

The poverty “line” so to speak is a per capita annual consumption expenditure of N137,430.

Nigeria has a poverty rate of 40.1%, i.e. this percentage lives below the poverty line.

With a population estimated at around 200 million, it means 80million people are living below the poverty line.

In terms of priorities, food comes first.

What does this mean for me and you?

Food is an essential item for the average household, and that won’t change anytime soon.

However, we have a huge population that is below the poverty line, and most likely isn’t feeding well then we also have rural people spending more on food.

That means there is an opportunity in agriculture, food production, processing, and the logistics of moving food around etc.

Whichever way you decide to key into the value chain, as an investor, an active player, or both.

Make sure you acquire the right experience as well as a long term view.