Nigeria’s food inflation sub-index crosses the 20% mark

Nigeria is currently facing a critical challenge with its food inflation sub-index crossing the 20% mark, reaching 20.6 percent year-on-year. This concerning trend is a result of various factors, including insecurity in major food-producing states and disruptions in the supply chain. Chike Nwagwu, the CEO of Novus Agro, shed light on the underlying issues contributing to this worrying inflation trend during a recent interview on CNBC Africa. Nwagwu highlighted the impact of the COVID-19 pandemic, floods, drought, and security issues on food production in Nigeria. These factors have created a 'perfect storm' scenario, leading to a significant decrease in food production levels and a subsequent increase in prices. The recent tragic killings of rice farmers in Nigeria's food-producing states further exacerbate the challenges faced by the agricultural sector. In response to these challenges, Nwagwu emphasized the need for authorities to address insecurity, ramp up production, and improve support for farmers. He noted that increasing production is crucial to meet the growing demand for food in the country and mitigate the effects of inflation. The ongoing African Continental Free Trade Agreement may offer opportunities for non-oil exports, but Nwagwu pointed out that the current focus remains on addressing domestic food supply shortages. Despite hopes for improved trade under the agreement, the impact on food exports is expected to be limited due to global disruptions in the food supply chain. Looking ahead, Nwagwu predicts a further rise in inflation in the first quarter of the year, citing ongoing challenges in production and supply chain disruptions. He foresees a one percent increase in inflation by the end of Q1, underscoring the urgent need for comprehensive measures to address Nigeria's food inflation crisis.