Dipo Olowookere
By Dipo Olowookere
Inflation in Nigeria for the month of April 2021 will increase by 18.76 per cent, higher than the 18.17 per cent recorded in March 2021, analysts at Meristem Research have predicted.
In the report released by the firm on Friday, which was seen by Business Post, the projected rise in April inflation was blamed on the rising food prices at the market.
It was stated that insecurity in the country, especially in the northern part, where most of the food crops are cultivated, has caused prices of food items to almost go beyond the reach of the common man.
Meristem Research further noted that apart from this, there is the problem of rising transportation costs, medical services and a proposed hike in electricity tariffs.
The firm emphasised that these issues “remain key risks to core inflation,” but pointed out that “the relative stability in the Investors and Exporters (I&E) window and parallel market rates over the past month provide some succour to FX stability following months of volatility.”
Nigeria has been battling with insecurity for years and according to some observers, things have become worse since President Muhammadu Buhari assumed office on May 29, 2015.
They claimed that though the previous administration of Mr Goodluck Jonathan had security challenges, it was never this bad as farmers were still able to go to their farms.
There have been reports that lately, farmers in the northern parts of Nigeria pay taxes to terrorists fondly called bandits by the governments.
Reports claim during the planting season, farmers pay a huge sum of money to terrorists as well as during harvest because failure to do this means they would not be able to have access to their farms.
Recall that last year, some Boko Haram terrorists killed more than 40 rice farmers in Borno State and this sparked a renewed call for the sacking of the former service chiefs.
This prolonged insecurity in food-producing states has had a negative impact on the food supply in the country, causing inflation to rise at an alarming rate.
In the report released by Meristem Research, it was noted that there has been a hike in the prices of poultry products stemming from a reduced supply of maize.
“Being the maize belts of the nation, increased insecurity in states like Kaduna and Borno has affected planting of the crop.
“The situation, which is further worsened by adverse weather conditions, has ultimately led to higher prices of the commodity.
“The CBN (Central Bank of Nigeria), in an effort to combat the effect of the higher cost of sugar and wheat in the international market, announced plans to place FX restriction on these commodities.
“This effort, which is intended to spur local production, could lead to higher prices of these commodities in the interim.
“We also note that food prices have increased markedly since Ramadan began. In our view, this could be a result of reduced productivity of Northern farmers who are predominantly Muslims,” the report noted.
