Thursday, July 29, 2021

CBN blames herdsmen and bandits for galloping inflation rate

The Central Bank Governor, Emefiele, stated that Nigeria’s growing food inflation is caused due to worsening security challenges.

Emefiele explained that the uptick in Nigeria’s food inflation is due to the worsening security situation in many parts of the country.

The CBN also voted to retain the MPR at 11.5% and other parameters constant.

Godwin Emefiele stated that the increase in inflationary pressure is attributable to security challenges in the food-producing areas in Nigeria, where farmers face frequent attacks by herdsmen and bandits in their various farms.

According to data from the National Bureau of Statistics (NBS), Nigeria’s food inflation stood at 21.79% in February 2021, being the highest rate recorded in over 15 years.

This persisting uptick in food inflation, however, was the major driving factor to the uptick in headline inflation. This was due to the worsening security situation in many parts of the country, particularly, the food-producing areas, where farmers face frequent attacks by herdsmen and bandits in their farms.

While the Bank is intervening significantly in the agricultural sector, the rising insecurity in some food-producing areas is limiting the expected outcomes in terms of supply to the market, thus contributing to the rise in food prices. The Committee further noted that the key drivers of the increase in core inflation included, the hike in the price of Premium Motor Spirit (PMS), upward adjustment in electricity tariffs, and the depreciation of the domestic currency (naira).” CBN MPC

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