The Central Bank of Nigeria has stated that transportation cost is the major cause of the surge in food inflation in Nigeria.
This was disclosed by the Governor of the CBN, Godwin Emefiele, while speaking at the first monetary policy committee meeting of the year.
The apex bank’s chief identified a wide disparity between the low prices at the Farmgate and high prices at the marketplace, meaning that transport may be a major factor in the surging food prices.
What the CBN is saying about food inflation
The CBN expects that the surge in inflation in December was transitionary and was caused by the December festivities.
To understand the root cause of inflation particularly food inflation, the central bank stated that they noticed that “prices at the farmgate were inline with expectations, however price at the marketplace is high.”
“If prices at the moment are high, it means there are some problems between the farm gate and the marketplace. We see logistics problems particularly transport,” he added.
The governor also identified the destruction of the food products as a primary challenge. He stated that the CBN is out to encourage people through interventions and looking to solve the logistics problem of delivering food from farms to markets.
In case you missed it
- The Monetary Policy Committee of the Central Bank of Nigeria has voted unanimously to retain the benchmark interest rate at 11.5%, whilst keeping all other monetary parameters constant.
- CBN has announced that the increase of interest rates in advanced economies will not affect the Nigerian economy as the funds released in these economies through stimuluses did not flow into Nigeria.
- The Central Bank of Nigeria has stated that individuals in need of funds don’t need to know anybody to collect loans from banks, and should desist from borrowing from loan sharks.
