Daud Olatunji
In the first quarter of 2024, the Central Bank of Nigeria (CBN) has facilitated the release of $689.88 million (N903.95 billion at the official exchange rate of N1,309/$ as of March 31, 2024) for food imports.
The National Bureau of Statistics (NBS) reported a 16.37% increase in food imports within the first six months of 2024.
The monthly Consumer Price Index (CPI) data indicated that the average price index for imported food surged to 806.0 points in June 2024, up from 692.6 points in January 2024.
This month-on-month inflation rate for imported food jumped to 36.38% in June 2024, compared to 34.83% in May, marking a 1.55% increase.
This inflationary pressure is attributed to the unification of all forex market segments by the CBN in June 2023, which led to a steep depreciation of the naira.
The unification process was intended to create a more transparent and efficient foreign exchange market but has resulted in increased costs for imported goods.
Over the past four years, imported inflation has consistently risen due to both internal and external factors.
In January 2024, the imported inflation rate was 26.29%, increasing to 29.81% in February—a 3.52% rise. March saw a further increase to 32.89%, April to 34.01%, May to 34.83%, and June to 36.38%.
While the overall trend is upward, the rate of increase showed signs of gradual deceleration from March to May before accelerating again in June.
Nigeria’s overall inflation rate surged from 33.95% in May 2024 to 34.19% in June, with the headline inflation rate in June 2024 at 34.19%, 11.40 percentage points higher than June 2023’s rate of 22.79%.
On a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, up from 2.14% in May.
Despite being touted as the food basket of Africa, Nigeria’s high food import bill remains a concern.
Between January and March 2024, Nigerians spent $689.88 million on food imports, a 1.77% increase from $677.61 million in the same period the previous year.
The government’s efforts to boost local production have been hampered by inadequate infrastructure, insecurity, and climate change.
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