Factors Contributing to Skyrocketing Food Prices- CBN Governor

The Central Bank of Nigeria’s Governor, Olayemi Cardoso, highlighted that the government’s extensive purchases of food items as part of palliative measures for vulnerable citizens have played a role in the surging food inflation within the country.

Cardoso’s remarks were made during the March Monetary Policy Committee meeting and were subsequently published on the CBN’s official website.

During the meeting, the Monetary Policy Committees decided to increase the benchmark interest rate to 24.75 percent from 22.75 percent, with the primary aim of addressing the rising inflation rates.

The latest Consumer Price Index report released by the Nigerian Bureau of Statistics revealed that the country’s inflation rate had risen to 33.2 percent in March.

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Specifically, the food inflation rate soared to 40.01 percent, marking a significant year-on-year increase of 15.56 percentage points from the previous month.

Despite the relative stability observed in the foreign exchange market, inflationary pressures have persisted, as noted by the CBN governor.

Cardoso emphasized that the tightening measures implemented since the last MPC meeting have yet to fully impact the system, leaving the risk of escalating inflation looming.

The governor also pointed out that the monetary factors contributing to inflation are gradually diminishing in significance, indicating the potential effects of decisions made during the 293rd MPC meeting.

Staff reports presented during the meeting highlighted that the primary drivers of inflation acceleration are the spikes in food and energy prices, which are closely linked to structural factors.