The Lagos Chamber of Commerce and Industry (LCCI), Nigeria’s leading organized private sector (OPS) group, has advised the federal and state governments on the need to adopt proactive measures to avert food, oil and gas, and other associated crisis in the domestic economy as the ongoing Russia-Ukraine war continues to disrupt the global economic system.
The Chamber, in a statement by its President made public on Sunday, Asiwaju (Dr.) Michael Olawale-Cole, pointed out that with Russia and Ukraine being the two of the world’s major suppliers of staple grains like wheat, a protracted crisis would heighten the likelihood of supply interruptions and higher food prices for many people, including millions of Nigerians who can least afford them.
Specifically, the Chamber cited a news report by Gallup News which indicated that Nigeria’s food supply would surely come under some pressure as it imported 4% of wheat from Ukraine and 27% of wheat from Russia in 2021 even as data from the National Bureau of Statistics (NBS) showed that Russia was the sixth major exporter to Nigeria as of the third quarter of 2021 coming only after China, India, USA, Netherlands, and Belgium in that order.
While expressing its concern about the uncertainty of how long the current disruptions in the food supply chain will last as wheat prices continued to surge globally, the LCCI stated that in developing economies including Nigeria, where populations already struggle to afford food, disruptions to food supply may result in substantial additional hardship and instability.
The Chamber further projected that disruption of Ukrainian wheat supplies may prove doubly painful for countries already squeezed by food insecurity and rising food prices as we have in Nigeria.
To forestall the wheat supply crisis, the Chamber urged the federal and state governments to open up their reserves (if there are any) to boost supply in order to stabilize prices at least in the short term.
Alternatively, it canvassed the need for the Federal Government’s intervention by way of initiating imports from other sources outside the war zones, stressing, however, that the most sustainable solution is for the government to boost local production of these staples to levels that meet local demand.
On the impact of the disruptions caused by the war on global supply chains, especially as reflected rising local prices of petrol and diesel, as in the case of Nigeria where we depend on oil imports, the LCCI lamented that looking at the economics of these crises, Nigeria should have been a major harvester of opportunities from Russia-Ukraine war in areas like gas supplies to Europe where Russian oil and gas have been rejected as part of sanctions on Russian for invading Ukraine but that unfortunately, the country do not have the infrastructure in place to produce enough gas for supply to Europe.
On the way for Nigeria, the LCCI stated: “In preparing for the reality of our near future, we urge the Federal Government to take seriously the completion of projects like the Trans-Saharan Gas Pipeline, a planned natural gas pipeline from Nigeria to Algeria.
“With this, we can explore the opportunity of exporting gas to Europe. We should also target Trans-Saharan and European markets with the ongoing construction of the Ajaokuta, Kaduna, Kano Gas Pipeline, popularly known as AKK Gas Pipeline. Arising from the calamities of this war, Nigeria can explore emerging opportunities to earn huge foreign exchange inflow in the medium to long-term”, it added.
While commending the government on the speedy evacuation of Nigerians from the war region, the Chamber also called on the “Federal Government to deploy the instrument of diplomacy in reaching out to well-meaning world powers towards a speedy resolution of this crisis.”
