Nigeria’s rising inflation figure capped by an increase in food commodities is likely to surge beyond control as projections tilt towards a negative outlook due to the persistent challenges facing the country’s food production and value chain, analysts say.
Commenting on the country’s 18.17 per cent inflation figure for the month of March, analysts at Afrinvest West Africa,a financial advisory firm envisaged a further rise in prices in the second quarter of the year due to poor weather conditions and insecurities in the country as well as the CBN’s focus on a pro-growth objective which will continue to drive increased money supply and escalate inflation rate in the near term
On his part, Akpan Ekpo, chairman, Foundation for Economic Research and Training (FERT) noted that the rising level of inflation is worrisome and likely to worsen if the right measures are not proficiently executed by the government and stakeholders in the agricultural sector.
“The food inflation is going up and yet they say we are doing well in agric. We have passed the threshold of single digit and very soon I hope it doesn’t become what economists call ‘runaway inflation’ where we can no longer control it,” he said.
The erstwhile director general of the West African Institute for Financial and Economic Management (WAIFEM) further explained that with the high inflation figures,the real interest rate becomes negative, implying that there are inconsistencies between savings and investment.
He further stressed that the situation is quite worrisome especially for the poor because the inflationary regime in the midst of an economic downturn and rising prices of goods and services does not give them the opportunity to make savings and investments.
Ekpo urged farmers and stakeholders in the agricultural sector to work towards improved farming and also enjoined the government to give farmers incentives to produce more not just rice but other basic food crops, deal with security challenges and also refrain from making announcements on certain things, as those announcements bring pressure on prices.