Cardoso explains why food items are expensive in Nigeria

The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has revealed that the massive purchase of food items for the Nigerian government's palliative is contributing to the rising food inflation in the country.

He made this known during the March Monetary Policy Committee (MPC) meeting, published on the apex bank's website.

Recall that MPC raised the benchmark interest rate to 24.75% from 22.75%, which it said was to tackle high inflation.

However, Nigeria's inflation rate increased to 33.2% in March, with food inflation hitting 40.01%, a yearly increase of 15.56 percentage points from 24.45% recorded in March 2023.

The National Bureau of Statistics (NBS) stated that the rising prices of items such as garri, millet, yam tuber, water yam, and others could cause the surge in food inflation.

The Nigerian government approved N5 billion for each state and the Federal Capital Territory following the removal of petrol subsidy to enable them to purchase food items for distribution to people experiencing poverty. The CBN governor noted that inflationary pressure had failed to thaw despite the rise in interest rates in February.

According to Cardoso, inflationary pressure remains high despite notable stability in the FX market, which results from decisions made at the MPC meeting. Punch reports that the CBN boss further said that the fiscal authorities better handled the new sources of inflation to complement monetary policy efforts.

Bala Bello, another MPC member, said both food and core inflation increased in February 2024, underpinning the rise in headline inflation to 31.70% from 29.90% in the previous month.

"Inflation is currently unacceptably high and requires decisive and coordinated efforts to curb it, given its adverse impact on citizens' purchasing power, investment decisions and broad output performance," he said.

Bala stated that the federal government's programmes addressing food insecurity, such as releasing grains from the strategic reserves, distributing seeds and fertilisers, and supporting dry-season farming, are essential and commendable.