Nigeria’s Imported Food Inflation Rises

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The high rate of inflation has also hit imported food in Nigeria as it is said to have risen by 28.9% in February 2024 as opposed to 26.3% rise only in January. This makes it its highest point so far.

Further analysis showed that imported food inflation has increased consecutively for the past 4 years; largely as a result of both internal and external factors.

The external factors include global supply chain shocks following the Covid-19 pandemic, Russia-Ukraine war, and surge in global oil prices, while the internal factors include FX scarcity and subsequent depreciation of the local currency.

Analysis shows that the Nigerian Naira depreciated by 37.7% and 17.3% in the month of January at the official and parallel market respectively, and closed at N1,456/$ and N1,470/$. Year-to-date, the naira has depreciated by 43.4% and 24.7%, and closed last at N1,602.75/$ and N1,614/$ respectively.

Consequently, the inflation rate rose to an almost 28-year high rate of 31.7%; largely driven by both the core and food component of the index.

Food inflation rose by 251 basis points to 37.92% while core inflation, which includes all items less farm produce and energy, increased by 154 basis points to 25.13%.

According to the NBS, food and non-alcoholic beverages contributed about 16.42% to inflation, which is mostly driven by increase in the prices of wheat and cereals, yam and tubers, fish, oil and fat, meat, fruit, coffee amongst others.

Also, the increase in the core component was mostly as a result of a surge in road transportation cost, accommodation, medical services, and pharmaceutical products.

The surge in Nigeria’s inflationary pressure is Despite several policies implemented by the CBN to tame the rising rate of inflation, and manage the volatility of FX; there’s still a surge in prices, thereby leading to inflation. However, Nigerians are hopeful for a change; they are hoping for a drastic reduction in food prices and other items too, and an end to the high cost of living that they are facing now.

 

 

 

 

 

 

 

 

 

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