January’s CPI and food inflation anxiety

Food prices rise daily to the consternation of Nigerians, amid various interventions by the authorities, writes ONYEKORMAKA ASABOR

Since the Consumer Price Index, which measures inflation increased in Nigeria to 15.6 per cent Year-on-Year in January 2022, according to the National Bureau of Statistics Report released on February 15, food inflation has been the aspect of most concern to Nigerians.

The reason for the worry cannot be farfetched as the NBS finding shows that the composite food index rose by 17.13 per cent in January 2022 against the 20.57 per cent in January 2021, noting that this rise in the food index was caused by increases in prices of bread and cereals, as well as other food products such as tubers, soft drinks, oils and fats and fruit. Of more concern is that the statistics readily finds expression in World Bank’s prediction in the last quarter of 2021 that increase in food prices could push additional six million Nigerians into poverty, calling government’s attention to short-term policies to support welfare.

The Washington-based institution stated this in its report ‘COVID-19 in Nigeria: Frontline Data and Pathways for Policy’. Similarly, in June 2021, the World Bank said an estimated seven million Nigerians were pushed into poverty in 2020 due to rising prices alone, without considering the direct impact of COVID-19.

Using the Nigeria COVID-19 National Longitudinal Phone Survey, the report examines the impact of the COVID-19 crisis on human capital, livelihoods and welfare of Nigerian households.


17.13% food inflation

Throwing light to the report as conveyed by the CPI for the month of January 2022, the bureau stated that, month-to-month, the food sub-index increased to 1.62 per cent in January 2022, down by 0.57 per cent from 2.19 per cent recorded in December 2021, explaining that the average yearly inflation of food for the 12-month period ending January 2022 over the previous 12-month average was 20.09 per cent, 0.31 per cent from the average recorded in December 2021 (20.4 per cent).

It added that core inflation, which excludes the prices of volatile agricultural produce, stood at 13.87 per cent in January 2022, up by 2.02 per cent when compared to 11.85 per cent recorded in January 2021. On month-on-month basis, the core sub-index increased by 1.25 per cent in January 2022. This was down by 0.13 per cent when compared with 1.12 per cent recorded in December 2021.

While analysing the food inflation aspect of the CPI as regards the price movements, the NBS noted that the CPI is weighted by consumption expenditure patterns, which differ across states. It explained that, accordingly, the weight assigned to a particular food or non-food item might differ from state to state, making inter-state comparisons of consumption basket inadvisable and potentially misleading. However, it reported that all Items Inflation In January 2022, on year-on-year basis, was highest in Abuja (18.59 per cent), Kogi (18.28 per cent) and Bauchi (17.61), Kwara (12.94), Niger (14.10) and Oyo (14.19).

On month-on-month basis, however, January 2022 recorded the highest increases in Jigawa (2.45 per cent), Kogi (2.34) and Zamfara (2.32), while Taraba (0.53), Abia (0.69) and Ondo (0.75).

Food inflation on a year-on-year basis was highest in Kogi (22.61 per cent), Enugu (19.84) and Akwa Ibom (19.67). Sokoto was 14.18 per cent, Bauchi (14.63) and Kaduna (15.01). On month-on-month basis, it was 2.87 per cent in Borno, Zamfara (2.62) and Kogi (2.53), while Abia was 0.29 per cent, Taraba (0.57) and Ondo (0.58).


Beyond media stunt

In as much as the Central Bank of Nigeria, in January, assured Nigerians that food prices would stabilise, and would not rise as people had anticipated in 2022, experts are unanimous on the view that the expectation of the apex bank is likely not going to be met, as long as the government remains lackadaisical towards finding lasting solution to the challenge posed by rising food prices to the populace.

The CBN Governor, Godwin Emefiele, gave the assurance during a chat with journalists after presenting the outcome of a two-day Monetary Policy Committee meeting in Abuja. He had attributed the rise in food prices to transportation, destruction of farm produce and post-harvest losses. In the same breadth, he blamed the activities of foodstuff hoarders and assured that the committee would do everything possible to stop it.

In a similar vein, President Muhammadu Buhari had, during the official unveiling of the CBN/Rice Farmers Association of Nigeria Rice Paddy Pyramids in Abuja, assured Nigerians that prices of food items, especially rice, would soon crash. This was just Emefiele revealed that following the successes recorded in the implementation of the CBN-led Anchor Borrowers’ Programme, the country had been able to significantly reduce rice importation from Thailand by over 99.83 per cent within the past seven years.

The assurances, no doubt, were trailed by mockery, as not few Nigerians described the Abuja rice pyramids as a media stunt to, again, beguile Nigerians ahead of 2023 elections.

Against the foregoing backdrop, not a few Nigerians were unanimous in their views that crashing prices of foodstuff through massive production and harvests goes beyond media stunt.


Way out

To frustrate World Bank’s prediction of doom, Mr Ebere Nwoke said, “There would be no end in sight to high food prices as long as the conflict between farmers and herders persists. It is also expedient to fix roads that lead to farms and markets across the country.

Mr. Adeoye Ajibola, a farmer in Mowe, Ogun State, urges the government to ameliorate the challenges of transportation from rural to urban areas, as it is one of the contributory factors to the sustained increases in the price of foodstuff. According to him, commercial bus and truck operators are usually forced to increase the fares.

He said, “Bad roads, frequent increases in fuel price and poor implementation of interventions by the Federal Government are the leading causes of hike in food prices in the country.”

Unarguably looking at the injection of more credit into the agriculture sector for food security, Emefiele, has hinted of plans to increase credit to the sector. The aim is to boost investments in agriculture and allied industries, distribution storage systems and necessary market infrastructure.

Emefiele, who made the disclosure at a dinner with the board of the United Bank for Africa in Abuja, mentioned the impact of access to credit on the productive capacity of the country.

In his remarks on ‘Food Security, Job Creation and the Role of the Central Bank’, the CBN governor stressed the critical role of financial institutions in enabling more inclusive growth of the economy following the series of external shocks that hit economies globally.

Get in Touch


Please enter your comment!
Please enter your name here

Related Articles