By John Ofikhenua and Okwy lroegbu-Chikezie
The National Bureau of Statistics (NBS) and the Lagos Chamber of Commerce and Industry (LCCI) yesterday decried increasing food inflation in the country.
Whereas the country recorded a marginal decline of 0.05 per cent in its inflation rate in April 2021, food inflation is still on the rise.
According to its Consumer Price Index report of last month, “the composite food index rose by 22.72 per cent in April 2021 compared to 22.95 per cent in March 2021”.
NBS blamed the sustained rise in food prices to soaring beverages prices, noting that “this rise in the food index was caused by increases in prices of coffee, tea and cocoa, bread and cereals, soft drinks, milk, cheese and eggs, vegetable, meat, oils and fats, fish and potatoes, yam and other tubers”.
LCCI Director-General, Dr Muda Yusuf, said the inflation rate was very high, despite the 0.5 per cent decline from the March 18.17 per cent figure.
This translated to 0. 23 per cent decline, while core inflation soared to 12.74 per cent from 12.67 per cent during same period.
The LCCI chief said food inflation at over 22 per cent was still very high, in spite of the marginal moderation in food prices in April 2021.
According to him, in spite of the five-basis points moderation in consumer prices, inflation rate remained high, as it doubled the Central Bank of Nigeria’s upper target range of nine per cent.
Yusuf said the impact of monetary interventions on agricultural output had been undermined by several structural constraints, including insecurity.
He said the moderation was largely on account of base effect of current drivers of inflationary pressures, inclusive of productivity challenges, worsening insecurity, persistent foreign exchange illiquidity and high energy costs.
“LCCI notes the marginal moderation (year-on-year) in headline inflation as domestic prices accelerated by 18.12 per cent in April 2021 compared to 18.17 per cent reported in the previous month.
“This is first time the economy would witness a moderation in consumer prices since August 2019 when the Federal Government shut the land borders.
“The chamber notes the slight moderation in food prices on year-on-year basis in April 2021 (22.72 per cent) compared to 22.95 per cent reported in March 2021.
“However, food inflation at over 22 per cent is still very high in spite of the marginal moderation in food prices in April 2021.
“The situation has continued to impact the activities of every economic agent, including households, businesses and investors with profound impact on the citizenry, particularly the low and middle-income households.
“The high level of inflation continues to dampen consumer purchasing power at a time households income are not increasing in proportion to cost.
“High inflation environment also impact businesses in terms of rising production costs and depressed margins, making it increasingly difficult for corporates to deliver impressive returns to shareholders.
“This has implications for the sustainability of investment,” he said.
Yusuf was hopeful that the Monetary Policy Committee of CBN, set to meet next week, would concentrate on addressing the persisting inflationary pressure should the economy maintain its positive growth trajectory in the first quarter.
“Tightening policy stance by raising the monetary policy rate would naturally have implications for interest rates across key segments of the financial market.
“Overall, we believe effective synchronisation of fiscal and monetary policies is crucial in the fight against high inflation,” he said.
During the period under review, NBS said on month-on-month basis, the food sub-index increased by 0.99 per cent in April 2021, down by 0. 91per cent points from 1.90 per cent recorded in March 2021.
The report added that the average annual rate of change over previous twelve-month average was 18.58 per cent, 0.65 per cent points from the average annual rate change recorded in March 2021 (17.93) per cent.
Continuing, the data said in April 2021, food inflation on year on year basis was highest in Kogi (30.52 per cent), Ebonyi (28.07 per cent) and Sokoto (29.90 per cent), while Abuja (0.05 per cent ) recorded the slowest rise in month on month food inflation with Rivers and Ogun recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).
In the period under review, the data showed that “all items less farm produce”, or core inflation, which excludes prices of volatile agricultural produce stood at 12.74 per cent, up by 0.07 per cent when compared with 12.67 per cent recorded in March 2021.
NBS explained that “on month-on-month basis, the core sub-index increased by 0.99 per cent in April 2021. This was down by 0.07 per cent when compared with 1.06 per cent recorded in March 2021.
“The highest increases were recorded in prices of pharmaceutical products, vehicle spare parts, Hairdressing salons and personal grooming establishments, garment, furniture and furnishing, medical services, shoes and other foot wears, motor cars, major household appliances whether electric or not, dental services, hospital services, non durable household goods and fuel and lubricants for personal transport equipment.
“The average 12-months annual rate of change of the index was 11.25 per cent for the 12-month period ending April 2021; this is 0.24 per cent points higher than 11.01 per cent recorded in March 2021”.
