Food inflation in Nigeria is skyrocketing, according to CBN Governor Olayemi Cardoso, who blames the government’s massive food purchases as a crutch for the country’s most needy population.
This statement was made by Cardoso in his remarks at the March Monetary Policy Committee meeting, which were published on Monday on the CBN website.
As part of its efforts to combat inflation, the Monetary Policy Committees (MPC) increased the benchmark interest rate during the meeting from 22.75 percent to 24.75 percent.
The Nigerian Bureau of Statistics (NBS) reported in April that the country’s inflation rate rose to 33.2% in March, according to the Consumer Price Index report.
In addition, food inflation hit 40.01 percent, up 15.56 percentage points from 24.45 percent in March 2023.
Despite the noticeable calm in the foreign exchange market, inflationary pressure has persisted, according to the CBN governor.
In spite of the fact that the 293rd MPC meeting brought about some calm in the foreign exchange market, he warned that inflationary pressures would not be reduced.
There is still a chance of galloping inflation, even though the system has not been fully tightened since the last MPC meeting, so the argument goes.
If this hyperinflationary scenario materializes, the tools at our disposal to rein in inflation may be severely limited. The evidence given to the MPC shows that the monetary variables that cause inflation are becoming less important.
The decisions made at the 293rd MPC meeting may have an effect on this. Moreover, he mentioned that staff reports indicate that increases in food and energy prices, linked to structural causes, are the main culprits for the acceleration of inflation.