Thread by @realkelvin07

This narrative is quite misleading.

If Tolarams used to buy Yellow maize from it’s aggregator for #100k per metric tonne spending #5bn for instance in 2019, but now has to buy at #250k per metric tonne for instance, spending #12.5bn,

It has to raise it’s prices by at least

https://twitter.com/oluwole_dada/status/1482965761912193024

3 times to break even for it’s cornflakes business. Has it’s turnover for gross revenues gone up from higher prices on it’s goods, yes, but so has it’s operating expenses.

This is the foundation for the food inflation we see today, because while the secondary processors are able

to manufacture, they lack the inputs to do so from several reasons:

• Insecurity in the North
• Increase in prices of fertilizer, seeds, chemicals, lack of equipment to mechanize

This is why I said, everything you do is competing with food, becos while the income of Nigerians

hasn’t gone up as per capita income has maintained the 40 year curve of $2100, the prices of food which contributes to 50% of inflation calculation has trippled.

So again, this narrative is misleading.

Solution is 2 pronged:

1. Have the DFD of the CBN transfer intervention

to banks and relax the rules on small companies involved in direct production for accessing it.

2. Encourage the FMCGs to adopt invoice discounting and change their model from horizontal to vertical to fund the farmers through cooperatives.