Central Bank Governor Attributes Galloping Food Inflation to Government Palliatives

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has pointed to government purchases of foodstuffs as palliatives as a significant factor contributing to the rapid rise in food inflation within the country.

During the March Monetary Policy Committee meeting, Governor Cardoso highlighted this concern, stating that despite efforts to combat inflation by raising the benchmark interest rate to 24.75 per cent from 22.75 per cent, inflationary pressures, particularly in the food sector, have persisted.

According to the National Bureau of Statistics, the inflation rate surged to 33.2 per cent in March, with food inflation hitting 40.01 per cent, representing a year-on-year increase of 15.56 percentage points. This surge has been attributed to rising prices of staple foods such as garri, millet, yam tuber, and water yam.

The Federal Government’s approval of N5 billion for each state and the Federal Capital Territory to procure food items for distribution to the poor has also been cited as a contributing factor to the inflationary trend.

Governor Cardoso emphasized the need for coordinated efforts between fiscal and monetary authorities to address the root causes of inflation, particularly the structural factors driving food and energy prices.

Other members of the Monetary Policy Committee echoed similar concerns, emphasizing the adverse effects of high inflation on citizens’ purchasing power and overall economic performance.

They commended the government’s initiatives to address food insecurity, such as releasing grains from strategic reserves and supporting agricultural activities, while also calling for decisive actions to curb inflation.