The National Bureau of Statistics (NBS), on Monday reported that Nigeria’s inflation rate had hit a 17-year high on the back of soaring food prices and supply chain disruption in September.
The Consumer Price Index’s (CPI) report showed that inflation rose to 20.77 per cent in September, the highest rate since 2005, up from 20.52 per cent recorded in the previous month.
The food inflation rate stood at 23.34 per cent on a year-on-year basis, including a surge from the 23.12 per cent recorded in the previous month.
The NBS attributed the increase in the food index to increase in the prices of bread and cereals, food productions, potatoes, yams and other tubers, oil and fat.
“All items, less farm produce” or core inflation, including the prices of volatile agricultural produce, stood at 17.60 per cent, up from 17.2 per cent recorded in August.
Prices of gas, liquid fuel, passenger transport by air, passenger travel by road and solid fuel recorded the highest increases.
In its analysis, the NBS explained that rising inflation rate was caused by a soaring food prices, disruption in food supply chain, rise in import cost due to the currency depreciation, and increase in the cost of production.
On State basis, the record shows that inflation is highest in Kogi (23.82 per cent), Rivers (23.49 per cent), and Benue 22.78 per cent), and lowest in Abuja (19.87 per cent), Borno (18.12 per cent) and Adamawa (18.42 per cent).
This rise in inflation rate received knocks by experts and other stakeholders.
It’s not enough to wholly attribute our economic woes to the war in Ukraine. Though, given the global inflation, we have imported inflation, and therefore, we have little or no control over that.
For instance, the Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture ( NACCIMA) Olusola Obadimu described any inflation rate that is above 20 per cent as bad for the production sector.
He advocated for a political will from the managers of our economy to take the decisions needed to address the nation’s mounting economic challenges. He lamented that an increase, especially when it is above 20 per cent, it is injurious to business health.
The Chief Executive Officer, Centre for Promotion of Private Enterprise, and the former Director General of LCCI, Muda Yusuf believes, “The accelerated growth in fiscal deficit financing by the Central Bank is boosting liquidity in the economy and has a profound effect of fueling inflation.”
In recent times, flooding has been on the increase, farmlands submerged, properties destroyed, while communities are sacked. For these reasons, experts foresee a worsened food scarcity, which may lift inflation above the roof.
If the issue of insecurity is not addressed, and farmers can’t go to work freely, there will be problems. Invariably, the government may be compelled to lift ban on importation of food.
If we because of rice shortage decided to commence rice importation, it will definitely aggravate the already dwindled economy.
Internally, more focused engagement needs to commence, and government must take necessary measures to stop the rapid downward slide, including the general standard of living of the citizens.
Since an increase in inflation is partly driven by insecurity, and the nation’s exchange rate regime, raising of the monetary policy ratio by the Apex bank will not reduce inflation, because the nation’s problem is not demand based.
To prevent the looming trouble, we need to restore the security around all the food producing parts of the country, particularly in the North East, Central and West.
Besides, the National Emergency Management Agency (NEMA) and other related agencies should find a way to placate the farmers who fell victim of flooding, to encourage them get back to work in the farm. Again, it must be mentioned that steps must be taken to prevent these disastrous floods from reoccurring.
As much as we are trying to diversify the economy, the oil sector cannot be written off overnight. More so, that the oil price is becoming encouraging at the international market. We must address and tackle the issue of theft in the oil sector once and for all, as we expedite action on increasing our production capacity to increase foreign exchange earnings and cushion the effect of deficit budgeting.
If all these steps are taken, it will bring moderation and normalcy to the situation. Inflation rate must be checked. It must commence a downward trend now, so that Nigerians would not be subjected to unprecedented hardship.