Nigerians should brace themselves for higher bread prices in the coming days as bakers announce their intention to raise prices. According to Engr. Emmanuel Onuorah, the president of the Premium Breadmakers Association of Nigeria (PBAN), the increase is necessary to offset the high cost of ingredients.
Bread is a staple food item for many Nigerians, and the cost of production has risen due to the withdrawal of fuel subsidies and the liberalization of the foreign exchange (forex) market by the federal government, as reported by Politics Nigeria.
Onuorah expressed a mixed feeling, tinged with a sense of déjà vu, regarding the situation. He explained that most baking ingredients are dependent on imports, including wheat-produced flour, Ascorbic Acid, Calcium Propionate, Yeast, and bread softener. The floating forex exchange rate has increased the cost of clearing these imported ingredients, which will inevitably lead to higher bread prices.
Onuorah also mentioned that flour millers attempted to use the forex exchange rate as an excuse to increase the price of wheat flour. If successful, this would result in a significant increase in the price of bread. However, such price hikes will likely lead to a drop in sales and the closure of more bakeries.
Furthermore, Onuorah lamented the impact of fuel subsidy removal on the bread-making business. The sudden spike in transport fares made it difficult for workers to afford transportation, hindering production due to labor shortages.
The president of PBAN also highlighted the negative effects of the federal government’s imposition of a 7.5% Value Added Tax on diesel, which has adversely affected production and sales.
