By Modupe Gbadeyanka
Last month, the National Bureau of Statistics (NBS) announced that inflation rate in Nigeria for the month of March 2020 increased to 12.26 percent.
One of the reasons for the rise was the continuous spike in the price of food items at the market caused by the border closure.
On March 29, 2020, President Muhammadu Buhari, in a nationwide broadcast, announced a lockdown of Lagos, Abuja and Ogun State to control the spread of Coronavirus in the country.
However, this did not affect the inflation rate for the month as pointed out by the stats office, which said in its report that “the lockdown in Abuja, Lagos and Ogun states and various major disruptions in normal economic activity in several states since then, started in April 2020 and accordingly would not have any major impact on March 2020 inflation which this report focuses on.”
The lockdown was only lifted on Monday, May 4, 2020 and during the period the movement cessation lasted, only businesses rendering essential services were allowed to operate, disrupting supply chain even for some food items, which were part of the essentials allowed to open.
Last month, Business Post reported that members of the Catfish and Allied Fish Farmers Association of Nigeria (CAFFAN) urged federal government to grant them special movement permit for the transportation of fish and its products from various fish farms to areas of need within the country.
National President of CAFFAN, Mr Rotimi Oloye, had said, “The inability of fish farmers to have access to their farms would have a multiplier effect across the fish value chain.”
According to him, this special permit was necessary to curb losses in the fish farming value chain during the lockdown declared by government in Lagos, Ogun and Abuja.
With the adverse event of lockdown in the three places, analysts at Financial Derivates Company (FDC) have said inflation rate in the month of April 2020 will likely jump by 1.74 percent.
In the company’s latest edition of Unity Bank Digest, it was disclosed that the lockdown induced by the the COVID-19 pandemic will probably lead the inflation to an eighth consecutive month rise to 14 percent.
“Headline inflation rose marginally to 12.26 percent (in March) from 12.20 percent in February.
“The slight uptick was mainly due to the base year effects of the border closure and the implementation of the new VAT rate (7.5 percent).
“March inflation figures did not reflect the adverse effect of the lockdown as the directive took full effect in April.
“As a result of the lockdown, businesses were shutdown, supply chains disrupted and panic buying commenced.
“On average, some domestic commodities prices spiked by over 50 percent.
“In all, it is expected that inflationary pressures will intensify and headline inflation for April could spike to 14 percent,” the analysts said.
Adedapo Adesanya