Bismarck Rewane, Chief Operating Officer (COO) of Financial Derivatives Company (FDC) Limited has said, inflation is likely to increase 0.9 per cent to a another high of 17.72 per cent, majorly on food concern.
“The Nigeria economy is now at the verge of a major food crisis as killings and kidnappings become the order of the day”, said Rewane.
He continued, saying, “the most recent attack in Ondo state has not only left the state in disarray but also signals a major food, revenue and foreign exchange crisis. Ondo state is the largest producer of cocoa in Nigeria and cocoa is the country’s largest non-oil export commodity. It accounts for 1.02 percent of total exports in the first quarter if 2022”.
He recalled that the Nigerian Monetary Policy Committee (MPC) took a hawkish stand at the end of its last meeting, but wonders, how far that measure could go in taming inflation.
“While an increase in interest rate is intended to reduce market liquidity and taper inflationary pressure, Nigeria’s inflation stoking factors appear to be more structural and cost push. Monetary policies are usually less effective in addressing supply-induced inflationary pressure”, he explained.
Again, he said, the prolonged Russian-Ukraine war is taking a toil on African economis, because the continent is still heavily dependent on food imports.
The National Bureau of Statistics (NBS) will publish its Consumers Price Index )CPI) report for the month of May this week.
