Soaring food prices push up inflation rate to 12.34%
Written by MaryGift Sunday on May 22, 2020
Nigeria’s annual inflation rate rose for the eight consecutive months to 12.34 percent in April, driven by higher food prices prompted by the COVID-19 induced restrictions across the country.
The National Bureau of Statistics (NBS) disclosed this yesterday in its Consumer Price Index (CPI) Report for April 2020.
According to the bureau, headline inflation rate rose to 12.34 percent in April, the highest in two years, from 12.26 percent in March due to increases in prices of food items namely potatoes, yam and other tubers, bread and cereals, fish, oils and fats, meat, fruits and vegetables.
The NBS stated: “The consumer price index, (CPI) which measures inflation increased by 12.34 percent (year-on-year) in April 2020. This is 0.08 percent points higher than the rate recorded in March 2020 (12.26 percent).
Increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the Headline index.
“On month-on-month basis, the Headline index increased by 1.02 percent in April 2020. This is 0.18 percent rate higher than the rate recorded in March 2020 (0.84 percent). “The urban inflation rate increased by 13.01 percent (year-on-year) in April 2020 from 12.93 percent recorded in March 2020, while the rural inflation rate increased by 11.73 percent in April 2020 from 11.64 percent in March 2020.
Also “On a month-on-month basis, the urban index rose by 1.06 percent in April 2020, up by 0.18 from 0.88 percent recorded in March 2020, while the rural index also rose by 0.98 percent in April 2020, up by 0.18 from the rate recorded in March 2020 (0.80) percent.
On Food Index it stated:”The composite food index rose by 15.03 percent in April 2020 compared to 14.98 percent in March 2020.
“This rise in the food index was caused by increases in prices of potatoes, yam and other tubers, bread and cereals, fish, oils and fats, meat, fruits and vegetables. “On month-on-month basis, the food sub-index increased by 1.18 percent in April 2020, up by 0.24 percent points from 0.94 percent recorded in March 2020.”
Attributing the rise in food prices to the continued border closure and increased demand for food, Professor Uche Uwaleke, stressed the need to enhance flow of stimulus packages to farmers in order to increase food production.
Uwaleke who is a Professor of Finance and Capital Market, Nasarawa State University, Lafia, said: “It is of interest that while core inflation, that is, all items less volatile farm products, is relatively under control at below 10 percent, the pressure is still coming from the food component which rose by over 15 percent.
This should be expected in view of the border closure and increased demand for food on the back of COVID-19 lockdowns. As a matter of fact, the rate of increase in food inflation could have been higher if the federal government had not released grains from the country’s strategic reserves.
“The way to cage it is to ensure that the stimulus packages get to farmers so that more food can be produced locally in the coming months considering that the borders may not be opened anytime soon due to COVID-19.”