The Minister of Finance, Budget, and National Planning, Dr Zainab Ahmed, disclosed that Nigeria’s food inflation will not drop as fast as other aspects of Nigerian inflation indices. She added that GDP growth for Q1 2021 was boosted by increased oil prices and economic production.
The Minister disclosed this at the end of the FEC meeting while briefing State House correspondents on Wednesday in Abuja.
What the Minister said
Dr Zainab Ahmed stated:
“Also, there is a further illustration that the slow, but gradual recovery process is indicative of the fact that business operations are returning to normal and that restrictions of movements and commercial activities have been relaxed after extended close-down in the year 2020.
Also, the agricultural sector posted strong growth at the rate of 2.28% in the first quarter of 2021, compared to previous quarters. This growth in agriculture signifies the resilience of the agricultural sector.
Also, the industry sector has recorded positive growth, even though a weak one, but the growth is a positive one and this marks the past quarter of growth over the past one year in the industry sector.
Services recorded a slight dip, but a small one at 0.39 percent.”
The Minister added that there was a boost in economic activities through the reopening of the economy. She also cited that crude oil price increased for the quarter.
“We have seen this positive growth being contributed by not just the oil sector, but also by economic activities within the metal sector, the cement sector, electricity, telecommunications, food, and beverages as well as human health and social services,” she said.
What the Minister said about inflation
The Minister revealed that for the first time in 19 months, inflation has shown a slight dip. Adding that “It’s a very slight dip, but it’s a positive point for us, we had indicated that our projection is that inflation will begin to flatten in the month of April 2021 and this is an indication,” she said.
“So, subsequent periods we are looking at inflation beginning to trend downwards. Food inflation will not come down as fast as the other aspects of inflation.
But it is important to also see that the rate of food inflation also showed a slight dip and the rise in food index, which you will see if you check the detailed report, is driven by foods such as coffee, tea, cocoa, bread, cereals, soft drinks, milk, cheese, not basic food items like rice, maize, and millet,” she added.
What you should know
Nigeria’s inflation rate stood at 18.12% in April 2021, indicating the first decline in headline inflation in about 20 months, a 0.05% point decline when compared to 18.17% recorded in March 2021.
Food inflation dropped from 22.95% recorded in March 2021 to 22.72%.