The Central Bank of Nigeria released $689.88m (N903.95bn at the official exchange rate of N1,309/$ as of March 31, 2024) to Nigerians for importing food items in the first quarter of 2024.
It was also gathered that the amount of food imported into Nigeria increased by 16.37 per cent within the first six months of 2024.
According to the monthly Consumer Price Index data released by the National Bureau of Statistics, the average price index for imported food rose to 806.0 points in June 2024, up from 692.6 recorded in January 2024.
On a month-on-month basis, imported food inflation jumped to 36.38 per cent in June 2024, from 34.83 per cent recorded in the previous month, which represents a 1.55 per cent increase as the naira weakened following the unification of all segments of the forex exchange market by the CBN.
The unification process in June 2023, aimed at creating a more transparent and efficient foreign exchange market, resulted in a steep naira depreciation.
Further analysis showed that imported inflation has increased consecutively for over four years, largely driven by both internal and external factors.
Data from the NBS on imported food inflation from January to June 2024 reveals a troubling and steady increase in costs. In January, Nigeria recorded an imported inflation rate of 26.29 per cent. This increased to 29.81 per cent in February, marking a notable jump of 3.52 per cent in the inflation rate from January.
The trend continued in March, with the imported food inflation rate climbing to 32.89 per cent, an increase of 3.08 per cent from February.
In April, the inflation rate further increased to 34.01 per cent, growing by 1.12 per cent from March, showing a slight deceleration in the rate of increase.
May recorded an imported food inflation rate of 34.83 per cent, indicating a continued upward trend. The increase in the inflation rate is 0.82 per cent from April.
By June, the imported food inflation rate had hit 36.38 per cent, marking an increase of 1.55 per cent from May.
While the overall trend is upward, the rate of increase in inflation shows signs of gradual deceleration from March to May before picking up again in June.
Recently, the Federal Government approved a 150-day duty-free window to allow the importation of maize, husked brown rice and wheat as part of efforts to tackle rising inflation which had impoverished many Nigerians.
Consequently, the government suspended duties, tariffs and taxes for the importation of certain food commodities through land and sea borders.
However, the President of the African Development Bank, Dr Akinwunmi Adesina, raised concerns over the federal government’s plan to import food, stating that the policy is depressing. According to him, Nigeria cannot rely on food imports to stabilize prices, and resorting to it could destroy the country’s agricultural policy.
Also, the National President of the All Farmers Association of Nigeria, Kabir Ibrahim, said the duty-free importation of food items would lead to the erosion of gains made in local maize, rice and wheat production.
He called on governments to invest through the provision of subsidies on inputs such as machines, fertilizers and chemicals to have a sustainable food system in the country.
Nigeria’s inflation rate in June 2024 surged from 33.95 per cent in May 2024 to 34.19 per cent in June. The headline inflation rate in June 2024 was 11.40 percentage points higher compared to June 2023, rising from 22.79 per cent.
On a month-on-month basis, the headline inflation rate in June 2024 was 2.31 per cent, an increase of 0.17 per cent from May 2024’s rate of 2.14 per cent.
Similarly, the quarterly statistics of CBN have shown that the country exported large amounts of food from foreign countries despite being touted as the food basket of Africa.
An analysis showed that its citizens spent $689.88m on import bills between January and March 2024. This was an increase of $12m or 1.77 per cent from $677.61m recorded in the same period of the previous year.
The high food import bill is a concern for the government. The country has a large agricultural sector, and there have been efforts to boost local production to reduce the dependence on food imports. However, factors such as inadequate infrastructure, insecurity, and climate change have hindered progress in the sector.
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