The Central Bank of Nigeria (CBN) has assured Nigerians that food prices will stabilize and would not rise as people had anticipated in 2022. He also claimed the higher inflation experienced in December was temporary
The assurance was made by the CBN Governor, Godwin Emefiele, during a chat with journalists after presenting the outcome of the 2-day Monetary Policy Committee (MPC) meeting on Tuesday in Abuja.
According to Emefiele, the rise in food prices could likely be attributed to logistical problems, especially on transportation or maybe the destruction of food produce or perishable items from farm to the market. He also blamed the activities of hoarders as part of the reasons for rising food prices, said the committee would do everything possible to stop it.
Read: Ohafia, a land of warriors: How inflation affects this small Nigerian town
Food Inflation is temporary
- Emefiele said the CBN is looking at the issues involved and will come up with good stories to tell about the trend by the next MPC.
- Transportation, “We found out that prices at farm gates are in line with our expectations because they are somewhat moderated; However, prices at the markets where our statisticians take their survey are high.“So, if prices at the markets are high, there is, therefore, some problems between the farm gates and the markets.”
- Logistic issues: “So, we see logistical problems, essentially bordering on transportation, also bordering on maybe destruction of food produce or perishable items from farm to market. “We are trying to encourage people who are interested in looking at how to resolve the logistical problems of delivering food from farm to market to come in and take advantage of some of the interventions that we have.’’
- Rise is temporary: He said the MPC was of the view that the rise in food prices in December 2021 was “temporary hence, the plan to look at it again in its coming meetings.”
Read: Transportation cost is the major cause of food inflation in Nigeria – CBN
On Anchor Borrowers
- Emefiele said the MPC was happy about the Anchor Borrowers programme, which started last year, adding that it would help to moderate food prices and stop hoarding.
- He said, “Luckily, we started a programme last year where we said for our own repayment of our loans under the Anchor Borrower programs, we will receive the produce into our own silos and our own warehouses and we will dispose them and sell them to the real end-users.”
- “Whether it’s the rice millers or the feed millers who need them to produce, so that through that mechanism, we can be seen to be competing with the hoarders in the market to moderate prices.’’
- According to him, it worked well in 2021 because between February and around August 2021, the central bank released on a monthly basis 50,000 tons of maize through those it recognised as feed millers.
- The CBN governor also said the MPC had ensured that the Nigerian commodity exchange would come alive.
The big picture
- It can be recalled that in the latest consumer price index report released by the National Bureau of Statistics (NBS), Nigeria’s inflation rate in the month of December 2021 rose to 15.63% from 15.4% recorded in November 2021, after 8 months of consecutive decline.
- The inflationary pressure has largely been fuelled by increasing food prices with food inflation increasing to 17.37% in December 2021, from 17.21% recorded in November 2021.
- President Muhammadu Buhari, during the official unveiling of the CBN and Rice Farmers Association of Nigeria (RIFAN) rice paddy pyramids in Abuja, had assured that prices of food items, especially rice will soon come down due to growing food production in the country.
