Food shortage, forex crisis responsible for inflation

Independent surveys and forecasts have shown that the increasing food prices and the rising cost of living have further diminished the ability of Nigerians to save and derive value from their incomes.

The surveys, polled yesterday ahead of tomorrow’s release of the latest inflation rate by the National Bureau of Statistics (NBS), showed Nigeria’s spiraling inflationary trend unabated.

Economic and finance research firms and analysts that had previously predicted the inflation trend, were unanimous that the inflation rate has risen by not less than 50 basis points, setting a new high in the past 17 years.

All projections indicated that the inflation rate will rise for the ninth consecutive time to between 21.31 percent and 21.32 percent in October 2022. The inflation rate had risen from 20.52 percent in August 2022 to 20.77 percent in September. It was 15.99 percent in October 2021.

The NBS is scheduled to announce the October 2022 inflation rate tomorrow.

Analysts at Financial Derivatives Company (FDC), which conducts independent consumer price surveys, stated that in contrast to the general expectation that harvest would drive down market prices, the food basket experienced a faster rate of price acceleration due to significant shortage in the supply of agricultural products as a result of the floods that ravaged major food-producing states.

The FDC said: “The naira has lost over 15 percent of its value relative to the dollar in the last month. Energy prices, including diesel and gasoline, have remained elevated, with diesel price hovering between N790 and N850 in the past month.

“More so, we expect month-on-month inflation to increase by 0.8 percent to 2.16 percent as the effect of floods outweighs the benefit of the typical harvest season in October.”



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