Nigerians have been warned to brace themselves for a hike in the price of bread, a staple on nearly every Nigerian table.
The producers claimed that their production costs had grown as a result of the federal government’s elimination of fuel subsidies and deregulation of the foreign exchange (forex) market.
Engr. Emmanuel Onuorah, President of the Premium Breadmakers Association of Nigeria (PBAN), remarked in an exclusive interview with our reporter, “For us in the premium bread making industry, it is a mixed feeling laced with a sense of déjà vu.”
He noted that most of the baking ingredients are import-dependent, adding that the floating of the forex has led to an increase in the cost of clearing the ingredients.
Onuorah said: “Most of our baking ingredients, ranging from flour produced from wheat to ascorbic acid, calcium propionate, yeast, bread softener, etc., are mostly imported. The forex floating led to an increase in the amount used for clearing; we know this will certainly lead to an increase in the price of bread.
“The flour millers even wanted to use the forex floating as an alibi to increase the price of wheat flour; if they did that, the price of bread would go up significantly because we would pass on the cost. With any increase in the price of bread now, there will certainly be more drops in sales, and more bakeries will certainly close shop”.
On the impact of the fuel subsidy removal, he said: “We feel that the decision was hasty without a clear-cut plan on how to mitigate the fallout of the policy on businesses and Nigerians. The President announced the policy before thinking of how to manage the fallout, more like putting the cart before the horse.
“The impact on my members was spontaneous because our workers were not able to afford the transport fare that spiked astronomically, thereby impeding production due to the unavailability of workers.
“Some of our members have delivery vans that use fuel; it spiked their cost of delivery, which dovetailed into an increased cost of production and reduced margins. Our distributors use delivery vans that use fuel; likewise, it affected their sales with the attendant drop in our volumes.”
The bakers’ chief also added that with the imposition of 7.5% VAT on diesel by the new government, the price shot up immediately, and this affected our production and sales negatively.”