Food Prices Will Worsen, Buhari’s Economic Advisory Council Member Warns

A member of the Presidential Economic Advisory Council, Bismarck Rewane, has said that Nigeria’s inflation will grow to 18.21 per cent, higher than the 18.12 per cent recorded in April.

Rewane in an interview on Channels TV on Wednesday said over the next two months, food prices will rise higher.

Prices of goods and services have doubled in the last few years due to the inflation which has been around 18.17 per cent in March and 17.33 in February, according to the National Bureau of Statistics.

The Central Bank of Nigeria has since battled to moderate the country’s rising inflation to single digit.

The Governor of CBN, Godwin Emefiele, had in 2019 said, “Our ultimate objective is to anchor the public’s inflation expectation at single-digit in the medium to long run.

“We believe a low and stable inflationary environment is essential to the growth of our economy because it will help support long term planning by individuals and businesses.”

But insecurity and foreign exchange woes have complicated the apex bank struggle to contain the inflationary pressure.

Rewane said on Wednesday that, “In the months of May, June and July, you will see higher inflation. But around the month of August, you will see a slow down.

“If you look at Nigerian inflation, it is 18.12 per cent, we are projecting that inflation goes up to 18.21 per cent when the number comes out on the 15th.

“The inflation numbers do not seem to gel. There are structural issues in Nigeria as well as supply bottlenecks, so you see for example the price of onion has spiked because of the strike. The price of beans is going to spike.

“There is money supply problem in Nigeria. Money supply is growing at 20.2 per cent that is M2. While output is growing at 0.5 per cent.”

He said the development implies that the amount of goods in the economy has increased by 0.5 per cent, but the money we have printed is growing by 20 per cent.

“That is not the only factor spiking inflation, there is exchange rate, there is insecurity and there are all other issues. The relationship between energy price and the price of goods,” he added.

He predicted that inflation will only drop towards the end of the year.

“We are going into the planting season this year. We have farmers consuming their seeds and their grains. Normally you consume your grains and you plant the seeds. This time they are eating some of their seeds and eating some of their grains.”

He said farmers are bound to witness poor harvest resulting from the consumption of their seeds.

Rewane explained that prices of petrol and electricity will be adjusted soon, adding that “all of these things means that costs are going to increase, but output will increase subsequently.”