Economic analysts have urged the federal government to adopt fresh strategies to tackle the rising high food prices and inflation in the country.
President of Capital Market Academics of Nigeria, Prof. Uche Uwaleke, advised the federal government to initiate more strategies to tackle rising food inflation.
Uwaleke who reacted to the May inflation figure, said that the federal government should devise more effective strategies to combat banditry and kidnapping to tackle inflation.
Recall that the National Bureau of Statistics (NBS), released the Consumer Price Index for May on Saturday which showed that headline inflation rate increased to 33.95 per cent in May.
The figure is 0.26 per cent points higher than the 33.69 per cent recorded in April.
The NBS said that on a year-on-year basis, the headline inflation rate in May 2024 was 11.54 per cent higher than that of May 2023 which was 22.41 per cent.
The report said the food inflation rate in May 2024 increased to 40.66 per cent on a year-on-year basis, which was 15.84 per cent higher than 24.82 per cent recorded in May 2023.
The NBS said that in May 2024, food inflation on a year-on-year basis was highest in Kogi, with 46.32 per cent, followed by Ekiti with 44.94 per cent.
Uwaleke added that the government should hasten repair of public refineries as well as scale up the number of compressed natural gas buses being introduced to ease transport.
“I have always maintained that, to deal with the rising food inflation, the fiscal authority has a lot of roles to play.
“This is because the major causative factors such as insecurity in the food-belt regions, transport and logistics challenges, as well as epileptic power supply and high cost of fuel, are all outside the control of the Central Bank of Nigeria,” he said.
Uwaleke said that Nigeria’s economy was being challenged by a cost-push inflation emanating from high transport and energy costs, as well as insecurity, among other issues.
He said that insecurity aggravated the situation through food supply shortages.
On the Kogi food inflation figure, Uwaleke attributed it to bad roads which, he said, made it difficult for farmers to convey food items from their farms.
“I understand the rural roads in Kogi are not in good condition; so, farmers have difficulty conveying food items from their farms. Insecurity is also a cause.
“Kogi (especially Lokoja) serves as a transit route for many travellers from the North to the South and vice versa, who normally stop over to eat and make purchases before proceeding on their journeys.
“This tends to push up prices of commodities in Kogi.
“Even in terms of headline inflation, Kogi has always recorded the highest except for last month when it was second highest after Bauchi,” Uwaleke said.
Also commenting, the chief executive officer of the Centre for the Promotion of Private Enterprises (CPPE), Dr. Muda Yusuf, said that the current inflation trend meant that the impact of the Presidential Task Force on Food was yet to be felt on the economy.
He argued that it would be very difficult to tame inflation if the country did not substantially fix power, logistics, forex, and security issues.
Yusuf attributed the rising inflation to supply-side issues like the depreciating exchange rate, surging transportation costs, logistics and supply chain challenges, forex market volatility, energy cost, climate change, insecurity in farming communities, and structural bottlenecks to production.
Yusuf advised that tackling inflation would require urgent government intervention to address the challenges bedevilling production, productivity, and insecurity in the economy.
“The real sector of the economy needs to be incentivised to ensure the moderation of production costs.
“The government could tweak the tariff policies by granting concessionary import duty on intermediate products for industrialists. The same is true of investors in the logistics sector,” he said.
He also said that the sub-nationals have much bigger roles to play in mitigating the challenge of food insecurity because they are closer to the players in the agricultural and food value chain.
“They are, therefore, better placed to impact agricultural productivity. The food security situation is frightening and requires an urgent and emergency response,” he said.
Also, managing director/chief executive, SD&D Capital Management Limited, Idakolo Gbolade, said the CBN needed to change its approach to taming inflation, stressing that the continuous increase in MPR was affecting the cost of doing business which has caused severe losses to business entities in the country.
Idakolo said, “The increasing energy cost and other operational costs are causing a downward trend in business activities.
“The federal government needs to improve the fiscal side by ensuring implementing measures that will aid ease of doing business are urgently effected.
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