Mr David Ibidapo, a Senior Research Analyst at AFEX Commodities Exchange has attributed rise in food inflation in Nigeria to low levels of agricultural produce. He said this while speaking on Wednesday in Abuja on the continuous rise of food inflation in the country. Supreme reports that the National Bureau of Statistics (NBS) in its […]
Mr David Ibidapo, a Senior Research Analyst at AFEX Commodities Exchange has attributed rise in food inflation in Nigeria to low levels of agricultural produce.
He said this while speaking on Wednesday in Abuja on the continuous rise of food inflation in the country.
Supreme reports that the National Bureau of Statistics (NBS) in its Consumer Price Index (CPI) report for March said composite food index stood at 22.95 per cent compared to 21.79 per cent recorded in February.
It added that the rise in the food index was caused by increase of prices in bread, cereals, potatoes, yam and other tubers, meat, vegetables, fish, oil and fats and fruits.
Ibidapo said that the quantity of food produced locally was not commensurate with the demand for the food items.
He added that land border closure in 2019 also contributed to the inflationary pressure on food.
Ibidapo said that over the years before the closure of the land borders, there had always been imported commodities like rice and some others which helped to meet the nation’s supply shortfall.
He added that insecurity in the major food producing states caused supply disruptions as farmers were not able to go to their farms, causing low production and further inflationary pressure on food prices.
“The issue of increase in fuel price which caused an increase in transportation prices also impacted on the increase in inflation of food.
“We also have other issues around the agricultural value chain such as the cost of production of food items which is currently high.
“This is due to the fact that we have huge infrastructural gap and logistics challenges, storage challenges and food loss while the commodities are moved to the market.”
Ibidapo, however said that the outlook for food inflation was still bleak as further pressure on food prices was still expected.
He said that the way forward was by enacting policies and actions to ramp up or increase production of food that would meet required standard.
He added that the only way to drive down food prices was to meet with demand levels.
He also said efforts should be intensified to unlock finance for small holder farmers, drive down cost of purchasing fertilisers and ensure improved use of machineries to make their work easier and better.
He added that institutions like AFEX was looking at ways that would aid farming and boost productivity.
“We are looking at how we can replace buildings with other collaterals.
“In traditional banking, those factors that they would have to consider before extending credit facilities, most of the small holder farmers which account for above 80 per cent of total production of food cannot meet up with them.
“Some actually live on or below the poverty line and it is a major challenge for them”, he said.