Finance Minister Counters Garba Shehu’s Claims On Price Decline, Says Food Prices Rising

Contrary to claims last week by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, that food prices were dropping, the Minister of Finance, Zainab Ahmed, on Monday said food prices are indeed going up.

Ahmed said this on NTA’s ‘Good Morning Nigeria’ programme on Monday.

Figures released by the National Bureau of Statistics had shown that the Consumer
Price Index, which measures inflation rose to 12.82 percent year-on-year in
July 2020.

The 12.82 per cent inflation rate is about 0.26 percent points higher than the 12.56 per cent recorded in June this year.

This is the highest inflation rate Nigeria will be recording in the last 29 months.

The last time Nigeria’s inflation was as high as this was in March 2018 when the country’s CPI was put at 13.34 per cent.

While the August inflation rate is being expected, the Governor of the Central Bank of Nigeria had predicted that rising inflation is expected to continue in the short run up to the end of 2020.

However, the minister said it was unlikely that the prices of food would rise further because of the increase in the price of petrol, adding that most trucks conveying agricultural produce use diesel and not petrol.

Ahmed said unlike in previous goverment where subsidy is done on consumption, it would be better if subsidy could be targeted at certain sectors of the productive economy.

She said, “It is true that food prices are going up and as I said earlier on, sensible subsidy is the one that is done on production, not on consumption because when you use gasoline in your car, you burn it and you have to put it in your car again and burn it.

“But if you now change the regime and say any truck that carries food or produce, the diesel price is subsidised, you are subsidising production because it means food items get to the market cheaper.

“But as long as you are subsidising consumption, whether it is fuel or electricity, there will always be the propensity for gain in the system and then there is always the fact that you are subsiding everybody and it is not everybody that needs it.”

The President’s spokesman had said last week that food prices were on the decline and even berated a Channels Television guest for saying otherwise.

Shehu had said, “We sat through the meeting of the National Food Security Council and we heard presentations by experts – people who had surveyed the markets.

“As of yesterday (Thursday), in the morning of the meeting, go and check the index in markets. For instance in Kano, millets that had gone up to N24,000 has now gone down to N12,000, N13,000.

“Rice that had been N25,000 is now N20,000. Corn, maize is now N18,000 for the old stock and N14,000, N15,000 for the new stock.

“So, to say that there is no change in the prices is to show one is completely detached from what is happening in the country.”