Governor of the Central Bank of Nigeria, Olayemi Cardoso, has pinpointed the government’s significant purchases of food items for distribution as palliatives to vulnerable citizens as a key driver of the surging food inflation in the nation.
His revelations came during the March Monetary Policy Committee meeting, detailed in the CBN’s Monday publication on its website, Channels TV reported.
Despite the MPC’s decision to raise the benchmark interest rate to 24.75 percent from 22.75 percent, aiming to combat inflation, recent data from the Nigerian Bureau of Statistics (NBS) in April revealed a surge in the country’s inflation rate to 33.2 per cent in March.
Food inflation also soared to 40.01 per cent, marking a year-on-year increase of 15.56 percentage points from March 2023’s 24.45 per cent.
Cardoso, in his remarks, highlighted that inflationary pressures persist despite relative stability in the foreign exchange market.
“If such a hyperinflationary scenario is to become reality, available options to control inflation could be severely constrained,” the apex bank’s chief cautioned.
Continuing, Cardoso said, “From the facts presented to the MPC, there is a clear indication that the monetary factors contributing to inflation are diminishing in their significance.
“This could be considered as evidence of the impact of decisions reached at the 293rd MPC meeting. Staff reports show that the principal drivers of acceleration in inflation are hikes in food and energy prices which are associated with structural factors.
“Further, new dimensions of inflationary pressure are emerging. First, ‘seller inflation’ arising from the oligopolistic structure of commodity markets, as noticed in the prices of local commodities, is gaining significance.”
He stressed the necessity for fiscal measures to complement monetary policy efforts in addressing these new inflationary sources.
