Bakeries in Nigeria shutting down as the cost of production bites

NIGERIA – The economic crisis in Nigeria is forcing bakery owners to shut down, due to their inability to meet up with the increasing cost of ingredients leaving bread prices on the high side.

Speaking to Economy &Lifestyle, Mr. Abayomi Olorunfemi, a baker noted that apart from shutting down business, some bakery owners are reducing the sizes and increasing the prices of bread to make ends meet.

“This country’s economy is really dealing with businesses. Many of my colleagues in the business are shutting down. Those who have three to four bakeries now have two,” Olorunfemi lamented.

According to him, this year, bakers have increased the prices of bread over three times due to the pressing effect of the depreciating currency coupled with the Russian-Ukraine war, which has resulted in the unavailability of enough flour all around the world

Most households have now jettisoned the pastry from their diet lists, as the prices of flour and other ingredients for making bread have continued to increase.

“It is very traumatic because customers no longer patronize bread due to the increased prices and small quantity and lessened quality.”

Mr. Aderotimi Samuel, a bakery owner, said he has two bakeries in Ikorodu but recently shut down one to be able to meet the cost of maintenance.

“I have two bakeries in Ikorodu which I have been running for over six years now.

He added that the cost of maintenance coupled with the increased prices of flour and other ingredients is disrupting the business forcing him to shut one down to be able to run the other.

In addition, the situation has affected jobs as manufacturers are laying off employees to cope with the situation.

The decry comes at a time when the USDA has slashed Nigeria’s wheat consumption and imports by 10% and 9% respectively owing to a weakening naira.

Post estimates marketing year (MY) 2023/24 wheat consumption to decrease to 4.5 million metric tons (MMT) recording a 10 percent decline while imports to decrease by 9 percent to 4.8 MMT.

Post attributes the decline to a weakening naira raising the cost of imported wheat, the ending of the national fuel subsidy that has eroded consumer purchasing power, and soft consumer demand for wheat-based products in favor of lower-cost alternatives.