Access Bank

​​‘Why taming high prices of food remains difficult’

Except the three tiers of government address the issues of productivity, insecurity as well as involvement of youths in the value-chain and promotion of initiatives in the agricultural sector, it may be difficult for the country to achieve food sufficiency and declined inflation.
With the latest data indicating dipping inflationary rate, there are, however, divided sentiments on the prices of food and other household items, as they remain relatively high despite various interventions by the Federal Government.
As the Monetary Policy Committee (MPC) meets today, the need to address key economic indicators, like the Composite Food Index which rose by 19.91 this June as well as interest rates and unemployment, rate remains topmost on the agenda.
With food inflation rate at 16.10 per cent as at June, the Natural Bureau of Statistics (NBS) report shows that pressure points still exist despite the general slowdown in inflation year-on-year, stemming from higher agro commodity prices due to soaring global food prices and exports.
The latest BMI survey reveals that by controlling inflation through currency manipulation and keeping fuel prices relatively stable, the Central Bank of Nigeria (CBN) will be able to cut rates in the second half, supporting an uptick in consumption.
Speaking on measures to tame food inflation, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, noted that the experience in the country borders on the level of productivity in the agricultural sector.
According to him, productivity is low in the sector despite the nation having a growing population that depends on obsolete farming methods.
His words: “Our farming population is aging. We have not moved the agricultural sector to a position where the elite and the younger generation will feel excited to participate. Things to sustain the presence of these classes of investors are not in the sector.
“We have security issues that have affected many of the food-producing areas. Apart from the insurgents, the herdsmen issue remains a concern that has kept many away from farming. The people being attacked are farmers.
“Our currency has become very weak. Hence, it has become more attractive to export both formally and informally. Most of the exports of food are informal, especially in the north. It is more attractive to export than to encourage local production. We need to implement policies to encourage productivity. Here is so much rhetoric about self-sufficiency but the reality is different.”
To the chairman of Manufacturers Association of Nigeria (MAN) Export Group, Ede Dafinone, export of agricultural commodities should not be blamed for increase in food prices.
“The number of food export is not large and the varieties are not wide. I do not think local consumption is so significant that it may affect local prices. Expanding export capacity will not affect food prices locally.”
he stated.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *