Analysts ask FG new strategies to fight food inflation

Economic analysts are calling on the federal government to adopt new strategies to combat rising high food prices and inflation in the country.

President of Capital Market Academics of Nigeria, prof. Uche Uwaleke, has advised the Federal Government to initiate more strategies to combat rising food inflation.

Uwaleke, who reacted to the May inflation data, said the federal government should develop more effective anti-banditry and kidnapping strategies to combat inflation.
Let us recall that the National Bureau of Statistics (NBS) on Saturday published the consumer price index for May, which showed that the headline inflation rate increased to 33.95% in May.

This percentage is 0.26 percentage points higher than the 33.69 percent recorded in April.

The NBS reported that on a year-on-year basis, the headline inflation rate in May 2024 was 11.54 percent. higher than in May 2023, which amounted to 22.41%.

The report indicated that the food inflation rate in May 2024 increased to 40.66 percent. year to year, i.e. by 15.84%. more than 24.82 percent recorded in May 2023
The NBS reported that in May 2024, year-on-year food inflation was highest in Kogi at 46.32 per cent, followed by Ekiti at 44.94 per cent.

Uwaleke added that the government should expedite repairs of public refineries and also increase the introduction of compressed natural gas buses to facilitate transportation.
“I have always maintained that fiscal authorities have many roles to play to tackle rising food inflation.

“This is because the main contributing factors such as insecurity in food supply regions, transportation and logistics challenges as well as energy supply for epilepsy patients and high fuel costs are beyond the control of the Central Bank of Nigeria,” he said . .

Uwaleke said Nigeria’s economy is challenged by cost-inducing inflation resulting from high transportation and energy costs, as well as insecurity, among others.
He said insecurity had worsened the situation due to food shortages.

Referring to Kogi food inflation figures, Uwaleke attributed it to the poor condition of roads which he said made it difficult for farmers to transport food items from their farms.

“I understand that rural roads in Kogi are not in good condition; therefore, farmers have difficulty transporting food from their farms. Uncertainty is also a cause.

“Kogi (especially Lokoja) serves as a transit route for many travelers from north to south and vice versa, who usually stop to eat and shop before continuing their journey.

“This tends to increase the prices of goods in Kogi.

“Even in terms of headline inflation, Kogi has always recorded the highest inflation except last month when it was the second highest after Bauchi,” Uwaleke said.

Also commenting, Chief Executive Officer of the Center for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf, said the current inflationary trend means that the impact of the Presidential Task Force on Food is not yet felt on the economy.

He argued that it would be very difficult to tame inflation unless the country fundamentally fixed its energy, logistics, currency and security problems.

Yusuf attributed the rising inflation to supply-side issues such as exchange rate depreciation, rising transportation costs, logistics and supply chain challenges, currency market volatility, energy costs, climate change, insecurity in farming communities and structural production bottlenecks.

Yusuf said tackling inflation will require urgent government intervention to address the challenges plaguing production, productivity and insecurity in the economy.

“The real sector of the economy must be encouraged to ensure that production costs are moderated.

“The government could modify the tariff policy by giving industrialists reduced import duties on intermediate products. It is similar with investors in the logistics industry,” he said.

He also said that local governments have a much greater role to play in mitigating the challenge of food insecurity because they are closer to participants in the agricultural and food value chain.

“They are therefore in a better position to influence agricultural productivity. The food security situation is appalling and requires an urgent and extraordinary response,” he said.

Additionally, the Managing Director/Chief Executive Officer of SD&D Capital Management Limited, Idakolo Gbolade, stated that the CBN must change its approach to curbing inflation, stressing that the continuous increase in MPR rates is affecting the cost of doing business, resulting in heavy losses to business entities in the country.

Idakolo said: “Rising energy and other operational costs are driving a downward trend in business activities.

“The federal government must improve the fiscal side by ensuring urgent implementation measures that make it easier to do business.