BUSINESSDAY
While the naira has appreciated against the dollar in recent weeks to become the world’s best-performing currency, food inflation in the country jumped to a historic high last month.
Naira’s appreciation, driven by a series of measures taken by the Central Bank of Nigeria including the clearing of foreign exchange backlogs, has yet to reflect on the cost of imported goods in Africa’s most populous nation, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Monday.
Food inflation, which constitutes more than 50 percent of headline inflation, rose for the 15th straight time to 40.01 percent in March this year from 37.92 percent in the previous month.
The CPI, which measures changes in prices of goods and services, also show that March’s food inflation rate is 15.56 percent points higher compared to the rate of 24.45 percent in March last year.
Apart from food inflation, the headline inflation also quickened to 33.20 percent in March, up from 31.70 percent in February. Core inflation, which excludes the prices of volatile agricultural produce and energy, stood at 25.90 percent, up from 25.13 percent.
The top five contributors to the country’s inflation rate are food and non-alcoholic beverages, housing, water, electricity, gas and other fuel, clothing and footwear, transport, furnishings and household equipment and maintenance with 17.20 percent, 5.56 percent, 2.54 percent, 2.16 percent, and 1.67 percent.
“The cost of food in Nigeria experienced a substantial increase of 40.01 percent in March compared to the same period last year. This surge marks the highest level of food inflation on record, highlighting severe challenges in food affordability and accessibility,” analysts at Comercio Partners Research said in a note on Monday.
They said food inflation has averaged 13.26 percent since 1996, with the highest recorded increase of 40.01 percent in March 2024 and the lowest decrease of -17.50 percent in January 2000.
The rise in food inflation was caused by increases in prices of the following items such as garri, millet, akpu uncooked fermented (which are under the bread and cereals class), yam tuber, water yam (under potatoes, yam, and other tubers class) and dried fish sardine, according to the NBS.
Others are mudfish dried (under fish class), palm oil, vegetable oil (under oil and fat), beef feet, beef head, liver (under meat class), coconut, watermelon (under fruit class), Lipton tea and Bournvita, and Milo (under coffee, tea and cocoa class).
