The Federal Government has announced plans to address inflation by releasing food from its strategic reserves after flooding destroyed local supplies.
This was disclosed by the Minister of Finance Mrs Zainab Ahmed at the presentation of the 2022 budget performance before the House of Representatives Committee on Finance on Wednesday in Abuja.
The Minister also stated that the government has plans to decongest ports to facilitate trade and remove roadblocks.
What the Minister said:
Zainab Ahmed said that Nigeria’s food inflation, which has risen above 23%, is worrisome. She blamed some factors imported inflation for this. She also noted that problems in developed countries have affected Nigeria, especially the Russian invasion of Ukraine that disrupted energy and fertilizer prices globally.
She also blamed the US Fed and the ECB rate hikes, which have affected imported goods prices. According to her, high diesel costs have also contributed to the high food inflation rate.
While commenting on what the FG and the CBN are doing to mitigate inflation, the Minister said:
“From the monetary side, what the CBN is doing to manage inflation is monetary tightening by mopping up liquidity. On the side of the government, President Muhammadu Buhari has authorised the National Food Security Council to release reserves. We held a meeting yesterday evening on how some support will be provided.
“One of the means is releasing stocks from the strategic reserves; we are also looking at how to support inputs like fertilizer production as well as inputs such as feeds.
“The committee will be meeting in the next couple of days to provide recommendations to the president that will be announced for implementation.”
Meanwhile, the Minister explained that the reason Nigerian importers prefer neighbouring ports was that the local ports are congested. According to her, “the unfortunate reality is that a lot of importers prefer to go to our neighbours to clear their goods as a result of that.”
The minister said the government has introduced very large scanners that will help hasten the clearing process and contribute to decongesting the ports. She noted that the rail line from Lagos to Abuja is also being extended to Apapa so that containers can be taken out of the Apapa ports to other locations for inspection.
“We believe that the combination of these efforts will improve the efficiency of our ports and result in Nigeria being able to attract its own business and businesses of our neighbours into Nigeria.”
What you should know
Nigeria’s inflation rate surged to 20.77% in September 2022, up from 20.52% recorded in the previous month.
On a month-on-month basis, the index rose by 1.36% compared to the 1.77% increase recorded in the previous month.
This represents the highest rate since September 2005, according to data tracked by Nairalytics, a web portal that publishes Nigeria’s historical macroeconomic data.
The food inflation rate in September 2022 was 23.34% on a year-on-year basis, marking an uptick from the 23.12% recorded in the previous month.