Food Inflation: Economist applauds FG’s 500,000 hectares plan to boost agriculture

An Economist, Prof. Uche Uwaleke, has commended the Federal Government’s effort to cultivate 500,000 hectares of land as a step toward increasing agricultural production.

Uwaleke, who is the President of Association of Capital Market Academics of Nigeria, gave the commendation in an interview with the newsmen in Lagos on Thursday.

He spoke on the heels of the federal government’s policies that could help address the high cost of food, as food inflation rises to 33.93 per cent in December.

The expert noted that the government’s initiative was a positive step toward addressing food security and potentially curbing inflation.

“The current effort by the government in boosting agriculture through the cultivation of 500,000 hectares of land, including the plan for Agric mechanisation, is a step in the right direction,” he said.

Uwaleke also applauded the plan to set up special security teams to address the issues of banditry, kidnapping, and insurgency.

He said, ” I equally applaud the plan to set up special security teams to rid our forests of bandits, kidnappers, and insurgents.”

The expert noted Inflationary pressure in Nigeria today was more on the food component reflecting the impact of cost push factors.

This, he said, arose, especially from high cost of electricity and fuel as well as flooding and insecurity, which continued to impact food supply.

He said, “There’s also the demand side occasioned by increasing money supply from rising FAAC allocations, fiscal dominance, and CBN’s Ways and Means, which feed into high exchange rates.

“Given these demand and supply inflation dynamics in Nigeria, both monetary, fiscal, and trade policies must be properly coordinated in order to boost production and tame inflation.”

Uwaleke encouraged State Governments to utilise the increased FAAC allocation wisely and strategically by focusing on productive activities that could drive economic growth and societal development.

“State governments should endeavour to apply the increase in FAAC allocation due to naira devaluation on productive activities.

“On its part, the CBN should ensure that direct advances to the FG in the form of Ways and Means are curtailed within the ceiling specified in the CBN Act,” he said.