Nigeria’s inflation soars as imported food prices bite

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Nigeria’s inflation rate surged to a new high of 33.69% in April 2024, according to the latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS). This represents a significant increase from 33.20% in March and a steeper climb of 11.47 percentage points year-on-year compared to April 2023’s 22.22%.

The NBS report highlights a troubling trend: rising food inflation, a key driver of overall inflation. The cost of imported food commodities jumped by 34% year-on-year, outpacing domestic food price increases. This points to a complex interplay of factors contributing to Nigeria’s inflationary woes.

The report read, ”In April 2024, the headline inflation rate increased to 33.69% relative to the March 2024 headline inflation rate which was 33.20 per cent. Looking at the movement, the April 2024 headline inflation rate showed an increase of 0.49% points when compared to the March 2024 headline inflation rate.

“On a year-on-year basis, the headline inflation rate was 11.47 per cent points higher compared to the rate recorded in April 2023, which was 22.22 per cent. This shows that the headline inflation rate (year-on-year basis) increased in April 2024 when compared to the same month in the preceding year (i.e., April 2023).”

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Imported Food: A Double-Edged Sword

Nigeria’s reliance on imported food items like wheat, flour, and certain fruits has made it vulnerable to global food price fluctuations and currency depreciation. The naira’s depreciation by 69% since June 2023 has significantly increased the cost of imports, pushing food prices upwards.

Domestic Food Production Challenges

While the rise in imported food prices is concerning, it also underscores the need to address challenges in domestic food production. Insecurity in food-producing regions, deteriorating rural infrastructure, and the impact of climate change are all contributing to limited domestic food output.

Looking Ahead: Policy Dilemmas

The NBS report raises concerns about the affordability of basic necessities for Nigerians. The government’s previous stance against food imports appears unsustainable in the face of rising global food prices.

The Central Bank of Nigeria may be compelled to maintain high-interest rates to curb inflation, but this could stifle economic growth.

Urgent action is needed on multiple fronts:

• Investing in domestic food production: Policies that incentivize and support local farmers are crucial to reducing reliance on imports.
• Addressing insecurity in food-producing areas: Creating a more secure environment for farmers is essential to ensure consistent yields.
• Infrastructure development: Upgrading rural infrastructure will improve food distribution and reduce post-harvest losses.

Nigeria faces a challenging path in curbing inflation and ensuring food security. A multi-pronged approach that tackles both import dependency and domestic production issues will be essential to navigate this complex economic landscape.