Nigeria experienced its highest level of imported food inflation in February 2024, up 352 basis points from 26.3% to 29.8% during the preceding month.
Nairalytics, the research division of Nairametrics, conducted an analysis that supports this.
Subsequent investigation revealed that causes both internal and external have contributed significantly to the import inflation that has been rising steadily for more than 4 years.
External factors include disruptions to the global supply chain brought on by the COVID-19 outbreak, the Russia-Ukraine war, and an increase in oil prices globally, among other things. On the internal front, the main cause is the lack of foreign exchange and the subsequent depreciation of the local currency.
The News Chronicles analysts report that the Naira fell on the official and parallel markets in January by 37.7% and 17.3%, respectively, ending the month at N1,456/$ and N1,470/$. The naira has lost value by 24.7% and 43.4% so far this year; it recently ended at N1,602.75/$ and N1,614/$, respectively.
Due to the influence of the index’s food and core components, the headline inflation rate increased over the study period to a level that was nearly 28 years higher at 31.7%.
Core inflation, which includes all products excluding farm produce and energy, grew by 154 basis points to 25.13%, while food inflation increased by 251 basis points to 37.92%.
The NBS reports that 16.42% of headline inflation was attributed to food and non-alcoholic drinks. The primary drivers of this inflation were price increases for wheat and cereals, yam and tubers, fish, oil and fat, meat, fruit, and coffee, among other items.
Similarly, the jump in the price of pharmaceuticals, lodging, medical services, and road transportation contributed to the increase in the core component.
Even though the CBN has put in place several measures to control foreign exchange volatility and slow the pace of inflation, there has been a spike in inflationary pressure in Nigeria.
