The International Monetary Fund has warned that food inflation might soon worsen in Nigeria and the neighbouring countries. According to the IMF, food accounts for 40 per cent of the consumption basket in sub-Saharan African countries.
According to the report Nigeria’s food inflation rate skyrocketed in February to 21.9 per cent, the highest recorded since October 2005. The IMF also noted that in 20 countries in the region, food inflation surged throughout 2019 and became stable during the early months of the COVID-19 pandemic at around nine per cent. It rose again starting from April this year until it reached 11 per cent in October.
“The outlook is highly uncertain,” an IMF report reads. “Food inflation and CPI inflation could moderate if commodity prices ease and pandemic-induced global supply chain disruptions resolve.
“However, high food inflation could persist if inflation expectations become de-anchored or supply chain disruptions continue. Regionwide, average inflation is expected to edge up in 2021 before easing next year depending on commodity prices and the resolution of supply-demand mismatches.”
The IMF further explained that another increase in food inflation would worsen the situation in Nigeria, a country that regularly faces banditry, terrorism, and other insecurities in general, saying: “Higher food inflation would worsen the situation for the countries already facing food insecurity and shortages with a disproportional impact on poor households.”
“The number of undernourished persons in the region is projected to have increased by 20 percent in 2020, encompassing 264 million people,” the report continued.