The International Monetary Fund has noted that the current food crisis ravaging Nigeria and other sub-Saharan African countries have been exacerbated by an over-reliance on food imports. This was according to a new report titled, “Africa Food Prices Are Soaring Amid High Import Reliance.”
The Washington-based lender noted that the staple food prices in sub-Saharan Africa were typically augmented by an average 23.9 per cent in 2020 to 2022, which was the most since the 2008 global financial crisis. The report showed that the increase was commensurate with an 8.5 per cent rise in the cost of a typical food consumption basket (beyond generalised price increases).
According to the report, the global factors were partly to be blamed for the rise due to the region’s imports of top staple foods, noting that the pass-through from global to local food prices were significant. In addition, it noted that the prices of both cassava and maize tripled in Nigeria, despite being locally produced. “We estimate that a 1 per cent increase in the consumption share of a staple food raises the local price by an average 0.7 per cent. The effect is even bigger when a staple is mostly imported, raising the price by about 1.2 per cent.
When a country’s net import dependence increases by one per cent, the local real cost of a highly imported staple is expected to increase by an additional 0.2 per cent. “The relative strength of a country’s currency is another driver as it affects the costs of imported food items. We find that a 1 percent depreciation in real effective exchange rates increases the price of highly imported staples by an average 0.3 per cent,” the report said.
On its part, the National Bureau of Statistics (NBS), disclosed that the reason for the year-on-year increase was the surge in the cost of importation due to the persistent currency depreciation and a general increase in the cost of production, including an increase in energy cost.
In its current Consumer Price Index report, the National Bureau of Statistics, noted that Nigeria’s headline inflation had continued to rise, hitting a new high of 21.47 per cent in November 2022 from 21.09 per cent in October 2022. The month-on-month increase recorded was attributed to the sharp increase in demand usually experienced during the festive season.
source: https://agronigeria.ng
