The International Monetary Fund says rising food prices is the major factor fuelling inflation in Nigeria and other Sub-Saharan African countries.
The IMF in a blog post said inflation is rising around the world, but because food accounts for about 40 percent of the SSA’s consumption basket, it plays a major determining role in inflation.
“Food inflation increased throughout 2019, on average, across 25 countries in the region where monthly food price data are available.
“After remaining stable around seven to eight percent (year over year) since the beginning of the pandemic, food inflation started to rise again from April this year to some 10 percent in October. The chart shows how food inflation is outpacing and contributing to the pick-up in overall consumer price inflation in sub-Saharan Africa, which rose to about eight percent in October, up from around five percent in 2019.”
It attributed the recent increase in food inflation to rising oil prices (which raise fertilizer prices and transportation costs), droughts and export restrictions imposed by some major food exporters, and stockpiling in some countries, but stated that the inflation could be moderated by the ease of commodity prices.
The body added that “pandemic containment measures disrupted production and imports of seeds and fertilizers and caused labor shortages during planting seasons.”
The IMF said on average inflation would continue to rise in 2021 before dropping in 2022 depending on commodity prices and the resolution of supply-demand mismatches.
The IMF added, “The number of undernourished persons in the region is projected to have increased by 20 percent in 2020, encompassing 264 million people.
“Fighting food insecurity through targeted social assistance and insurance can help populations cope. Avoiding trade barriers and improving access to finance, seed stocks, insecticide, fertilizer, anti-erosion measures, and irrigation are also important.”
