Nigeria’s 18.3 percent inflation highest on food costs in nearly 3 years

*The National Bureau of Statistics reports Nigerian consumer prices rose 14.9% November 2020 from a year earlier, as annual food inflation accelerated to 18.3% from 17.4%

Emmanuel Akosile | ConsumerConnect

Inflation in Nigeria is reported to be an almost three-year high November 2020, as Dollar shortages, insecurity in farming areas, and supply bottlenecks stoked food prices in the country.

The National Bureau of Statistics (NBS) in a report published on its Web site Tuesday, December 15, 2020, revealed that consumer prices rose 14.9% from a year earlier, compared with 14.2% in October.

That matched the median estimate of three economists surveyed by Bloomberg, as costs increased 1.6% in the month.

In respect of key insights in the report, the food index, which accounts for more than half the inflation basket, rose 18.3%, compared with 17.4% in October, which is said to be the highest rate since January 2018.

Costs increased 2% in the month. That’s adding to the challenges of an economy in a recession that could push an extra 6.6 million Nigerians into poverty, according to World Bank estimates.

President Muhammadu Buhari’s order to restrict Dollar access for food and fertilizer imports has driven traders to the parallel market for foreign exchange (Forex), where they pay a lot more.

The move, report stated, aimed at boosting local production, has raised costs for importers and added to upward pressure on food prices.

A slew of attacks on Nigeria farmers also has pushed down food reserves, raising the price of key staples.

Annual inflation has been above the 9% top of the Central Bank of Nigeria (CBN) target range since 2015.

The rate could remain in double-digits unless authorities reform monetary policy to focus on price stability, the International Monetary Fund said last week.

Extra interest-rate cuts after 200 basis points of easing this year are unlikely to give an additional boost to the economy, the lender said.

Nonetheless, the CBN noted in its November 2020 rates announcement, where it held borrowing costs, that the upcoming harvest and recovery in domestic production should ease food inflation.

Meanwhile, Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget ad National Planning, November said that Nigeria would open its land borders “very soon”.

The Federal Government’s announcement raises hopes that the blockades that have been in place for more than a year and added to supply constraints may be lifted at some point, report said.

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