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Rising inflation in Nigeria fuelled by insecurity, naira devaluation -Emefiele2mins read


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CENTRAL Bank of Nigeria (CBN) governor Godwin Emefiele has said that rising inflation in the country was caused by devaluation of the naira and security crisis.

Emefiele said this on Tuesday while presenting the communique after a two-day Monetary Policy Committee (MPC) meeting.

According to Emefiele, inflation, which had increased for the 18th consecutive month, was exacerbated by food inflation, noting that insecurity in many food-producing areas of the country was a major contributing factor.

“The MPC noted with concern the continued uptick in inflationary pressure for the 18th consecutive month as headline inflation continued on an upward to 17.33 percent at the end of February 2021, from 16.47 per cent in January 2021.

“This increase continues to be attributed to both food and other core components of inflation. This specific uptick in food inflation was the major driving factor for the uptick in headline inflation,” said Emefiele.

The CBN governor added that in many parts of the country, particularly the food-producing areas, farmers faced frequent attacks by herdsmen and bandits in their farms.

The apex bank’s governor said that while the bank was making significant intervention in the agricultural sector, the rising insecurity was limiting expected outcomes in terms of supply to the markets.

Emefiele further stated that the inflationary trend was also worsened by the hike in the pump price of petrol, the upward adjustment of electricity tariff as well as depreciation in the value of the naira.

The northern part of Nigeria has been engulfed in several crises of insecurity bordering on banditry, insurgency and others.

The Small-Scale Women Farmers Organisation in Nigeria (SWOFON) said recently that one of the major challenges facing farmers was insecurity.

According to SWOFON, the most painful of the encounters of the women farmers across the country were the activities of kidnappers, bandits, and terrorist groups like Boko Haram.

“As of today, many women farmers are afraid of going to their farmlands for fear of being kidnapped, raped, extorted by bandits, and killed,” SWOFON said.

In November 2020, Boko Haram claimed responsibility for the killing of 78 farmers in Zabarmari, a community in Jere Local Government Area in Borno State. Although the official figure given by the Nigerian authority was 48, many felt the number was higher.

Ned Nwokolo, the team lead of NexTier SPD, a consultancy firm on human security, said that bandits and insurgents now demanded levies from farmers.

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Nwokolo said in Nigeria, farmers were no longer secure and most of them had refrained from going to their farmers due to insecurity.

“It is equally happening all over the country, it’s happening in Zamfara State, in Niger State, in Sokoto, and Katsina. Farmers are suffering. You can’t go to a farm now without someone coming to take levies from you.

“The other day, I have my researchers in Zamfara State telling me that they (Boko Haram) actually wrote to farmers asking them to pay some sort of levy before they can go back to harvest their products,” Nwokolo said.

On Monday, the  ‘Hunger Hotspots’ report released by the Food and Agriculture Organisation of the United Nations (FAO) and the World Food Programme (WFP) ranked Nigeria among the top three countries where acute hunger and food insecurity were set to worsen in the coming months.

The report stated that the conflict-hit areas in North-East were responsible for Nigeria’s worrying ranking among the top countries where citizens were starving.

Moreover, Nigeria’s naira has been devalued from N360/$ pre-Covid-19 to N410-N420/$ since the pandemic began. A dollar exchanged at N480-N486 at Lagos parallel markets on March 24.  Oil price  and demand in the global market have dropped since the pandemic began, leading to lower foreign exchange (FX) inflows into Africa’s most populous nation which relies on mainly oil for sustenance. Lack of good management of FX market and low manufacturing and export capacity have worsened the fate of Nigeria, with jobless rate rising to 33.3 percent in the fourth quarter of 2020, from 27.1 percent in the second quarter of the same year.

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