Food inflation is major culprit of COVID-19 in Nigeria … Exacerbated by disruptions in crop production

The COVID-19 pandemic that hit the world , particularlyNigeria early last year may have dislocated the food supply chain from the farms to the home homes, causing food prices to hit the roof in the country.
While the COVID-19 made it difficult for food to be supply liberally to all parts of the country, attacks on farms caused less food production.
Overall annual consumer price inflation climbed to 17.3 per cent in February, from 16.5 per cent in January, the highest level in four years. That was driven by food inflation, which at 21.8 per cent in February was at its highest for more than a decade.
Covid-19 is “a black swan event” and Nigeria’s import restrictions and naira weakness have worsened the situation, says Wale Okunrinboye, an investment analyst at Sigma Pensions in Lagos.
“Given the absence of active commodity exchanges and significant food reserve storage systems, supply-side vulnerabilities ensure that any disruptions to crop production rapidly translate into high food prices,” he says. The country will need to allow imports of key food items to help contain prices, he adds.
Food distribution is “marred with supply chain issues such as bad roads and poor storage facilities,” says Abdulazeez Kuranga, an economist at Cordros in Lagos. A lot of food is spoilt before it reaches the final consumer, he says. “It is safe to say Nigeria finds itself in a food crisis.”
Nigerian food inflation, now at its highest since 2008, shows that food security is the country’s overriding problem.
January’s overall inflation rate of 16.5 per cent was the highest since mid-2017, lifted by food inflation which accelerated to 20.6 per cent.
Inflation will “certainly remain elevated over the medium term, and may actually rise in 2021,” says John Ashbourne, emerging markets economist at Fitch Solutions in London. “Until the government abandons its efforts to cut down on food imports, we are unlikely to see a real change.”
President Muhammadu Buhari closed land borders with Benin, Niger, Chad and Cameroon in August 2019 to prevent food smuggling and encourage local agricultural production.

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