The National Bureau of Statistics (NBS) painted a gratifying picture of Nigeria’s inflation level. Its latest inflation rate was 17.75% in June 2021, a decrease from the previous month’s 17.93%.
Despite the decline, it is a fact that the Consumer Price Index (CPI) rose by 17.75% in June 2021 compared to the same period in 2020. This means that although Nigeria’s inflation rate appears to have reached a peak of 18.17% by March 2021, the prices of goods and services are still rising at a double-digit rate.
Specifically, the CPI food sub-index rose 21.83% year-on-year, from 363.9 points in June 2020 to 443.4 points in June 2021, eroding the purchasing power of Nigerians. Let’s take a look at the food items that have the greatest pressure on prices and inflation.
A cursory look at the inflation report reveals that the foods that are causing current inflationary pressures in the country include bread and cereals, potatoes, yams and other tubers, milk, cheese and eggs, fish, soft drinks, vegetables, fats and meats.
At the same time, the Food Price Report of the National Bureau of Statistics shows that in June 2021, food prices have increased by more than 25% year-on-year. It is worth noting that the price of beans rose by 66.47% year-on-year in June, ranking the highest, while garri followed closely in the same way, with prices rising by 51.01%.
Corn, an important food used in the production of many other human consumables and animal feeds, also soared by 49.2% during the period under review, while the prices of Gary, onion and palm oil increased by 40.3% and 35.3%, and 28.6% respectively. .
The Nairametrics food price survey took into account the changes in the prices of major foods in Lagos State, and also revealed that the prices of these listed items have risen sharply. According to data obtained by Nairametrics research, the price of pepper has soared by 171% between July 2020 and 2021.
In addition, the price of a basket of tomatoes rose by 166.7% in one year, with an average selling price of N40,000, while the price of a large bag of red beans rose by 158.8%. As of July 2020, the average selling price of large bags of brown beans is N29,750, but now the average selling price in the main market of Lagos State is N77,000.
Why keep increasing?
A large part of the problem of rising food prices is the insecurity in the country’s food-producing states, as well as kidnappings and killings in the highlands of northern Nigeria.
This caused fear and panic among farmers and forced them to stay at home, thus affecting the food supply in most parts of the country, especially in the south, because most of their food supply basically depends on the supply from the north.
In conversations with pepper sellers at the Mile-12 market in Lagos, Mr. Usman explained that food prices have escalated due to fears of bandits and kidnappings ravaging the northern part of the country.
He emphasized that some farmers were kidnapped and they had to make donations to ensure their release by paying a ransom.
Malam Issa, a tomato seller in the market, also supports it. “If the country’s security problems can be eliminated and farmers can return to their farms again, food supply will be restored and food prices will reach a certain level.”
However, he said that although insecurity has affected food prices, other factors have also led to continued increases, most of which include the general increase in the prices of items used to help planting such as fertilizers. He mentioned that exchange rate depreciation has also affected food prices because some agricultural products are also imported from neighboring countries in Africa.
The inflation rate of an economy reflects the rate at which the prices of goods and services in that country are rising or falling. In simple terms, inflation describes an economic situation where the prices of goods and services are generally rising.
Although the inflation rate indicates the level of economic growth, the increase in food prices, especially at such a rapid rate, is an unfavorable development for Nigerians and businesses that are still struggling to cope with the impact of the covid-19 blockade.
Because Nigeria’s inflation rate is still so high, the average income of Nigerians is still at the same level, and the country lacks investment options that can surpass the inflation rate in terms of return on investment, the loss of citizens’ purchasing power is inevitable. .