NIGERIA – Nigeria’s food inflation rate surged to 21.79% in February 2021, which is the highest rate recorded in the country since October 2005.
The February 2021 CPI and Inflation Report as released by the National Bureau of Statistics (NBS) revealed that the rise in the food index was caused by increases recorded in the prices of bread and cereals, potatoes, yams, and other tubers.
Also, the increase in the prices of meat, food products, fruits, oil, and fats, vegetables, and fish contributed to the recorded spike in the food inflation rate, reports Nairametrics.
The average annual rate of change of the Food sub-index for the twelve-month period ending February 2021 over the previous twelve-month average was 17.25%, 0.59% points from the average annual rate of change recorded in January 2021 (16.66%).
Notably, in February 2021, food inflation was highest in Kogi State (30.47%), Ebonyi (25.73%) and Sokoto (25.68%), while Gombe (19.32%), Bauchi (18.74%), and Akwa Ibom (18.70%) recorded the slowest rise in year-on-year inflation.
A look at the historical data shows that Nigeria’s food inflation rate has witnessed persistent increase since September 2019, which was around the time President Muhammadu Buhari ordered the closure of land borders in the country.
It is however, worth noting that the President ordered the reopening of the land borders in December 2020.
While the border closure caused food prices to increase, the outbreak of the covid-19 pandemic in 2020 further contributed to the increased food inflation rate.
The covid-19 pandemic necessitated the Federal Government to declare a nationwide lockdown as a measure to curb the disease in the country. Also, the pandemic invariably caused the crash of oil prices and Nigeria’s export earnings.
The fall in foreign earnings led to CBN’s devaluation of the naira twice in the year as it could no longer sustain the exchange rate at N306/$. The devaluation and depreciation increased cost for producers/suppliers which was subsequently transferred to customers, thereby increasing the cost of food items.
Meanwhile in neighbouring Ghana the narrative was opposite as food and non-alcoholic beverages inflation fell to 12.3% in February from 12.8% of the previous month.
With this rate, food contributed 52.6 percent to overall inflation. This is the lowest since September 2020, reports Ghanaweb.
Within the Food Division, Vegetables with 17.4 percent inflation has the highest rate of inflation but lower than the last month’s rate of 20.3 percent.
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