MPC members lament over impact of insecurity on food prices
Members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have raised concerns over the likely impact of the rising insecurity on food prices.
The National Bureau of Statistic (NBS) had reported that inflation rate slowed to 17.93 per cent in May this year, while food inflation had dropped from 22.72 per cent recorded in April 2021 to 22.28 per cent in May 2021, but the MPC were concerned that the rising insecurity in the country could further push up prices.
A member of the MPC, Festus Adenikinju in his personal statement expressed satisfaction on growth and inflation, however, noted that the economic recovery rate is still very weak and fragile. Poverty and unemployment rates are still quite high.
“The security situation in the country is hurting economic recovery, while at the same time, poverty and unemployment also contributes to the worsening security challenge we have. As we enter another planting season, the effect of climate change may have negative impacts on food prices in the latter part of the year.
He encouraged the CBN to use its administrative tools to rein in inflation, especially, those coming from monetary impulses, and to expand the current intervention programmes targeted at boosting real consumption by households, and production by SMEs.
“The current efforts of the CBN to promote dry season agriculture would be quite helpful. There is a need to expand the Targeted Credit Facility (TCF) and the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS) to ensure more Nigerians benefit from the programme,” he stated.
On his part, CBN deputy governor, Corporate Services, Adamu Lamtek noted that with Nigeria projected to grow by about 2.5 per cent in 2021, the growth of the country is “below her potential and obviously not enough to significantly alleviate the unemployment situation.
“To spur all-round economic recovery and brighten the outlook for overall growth, fiscal actions must be aimed at supporting a wide range of activities including contact-intensive activities that have been heavily impacted by the COVID-19 pandemic,” he stressed.
