#Financial news

Insecurity fueling food scarcity —Experts

By Francis Akinnodi


Economic experts have blamed security challenges in food-producing states of Nigeria as one of the major factors fuelling the surge in food inflation as the country’s inflation rate jumped to its highest level in more than three years.
Nigeria’s inflation hastened by 15.75 percent (year-on-year) in December 2020, according to new figures released by the National Bureau of Statistics (NBS).
According to NBS monthly report released and monitored by The Hope, it explained that the increase was 0.86 percent points higher than the 14.89 percent recorded in November 2020 for a country still struggling to cope with its economy.
“This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetable, fish and oils and fats.”
The highest increases were recorded in prices of passenger transport by air, medical services, hospital services, shoes and other footwear, and passenger transport by road, among others, according to the NBS.
According to an Economist at the department of Economics, Ado Ekiti University, Dr. Timothy Awe, said the inflationary pressures were coming particularly from volatile food items.
“We must recognise that the disruption we have had in the northern part of the country in terms of food production has a direct impact on food inflation.
“We should expect these pressures to continue in the next couple of months. We should expect that the price of diesel will further increase because crude oil price has moved up and exchange rate has also increased.”
Also an Akure based Economist, Elder Fessy Olabode noted that the inflation rate for December was increased by the lingering effects of border closure, increase in Value Added Tax, electricity tariffs and the pump price of fuel.
He said, “Insecurity may have also accounted for why the food inflation was high in some states especially from the north. The rate of increase in urban inflation gives cause for worry. This may not be unconnected with the rise in rural-urban migration.
“Given that food inflation remains the major challenge, the inflation rate is expected to moderate this year following the intensification of the Central Bank of Nigeria’s interventions in agriculture and improvements in forex supply, the implementation of the 2021 agriculture budget and transport infrastructure, border reopening as well as improvements in security.
“It is important that the relevant agencies of government plans ahead to tackle flooding issues which is detrimental to the farming season,” he said.
They noted that people disposable income had been negatively affected by the hike in electricity tariffs, increase in oil prices, general reductions in subsidies and improved tax mobilisation.
“The continued pressure in the food basket is reflective of the impact of the underwhelming harvest season, persistent security challenges in the food-producing regions, and festive induced demand which further widened the demand-supply imbalance,” they stated.

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