Nigeria’s imported food inflation soars to 36.38% in June 2024

Nigeria’s imported food inflation rate surged to 36.38% in June 2024, up from 34.83% in May, marking a 1.55 percentage point increase, according to the latest Consumer Price Index (CPI) data released by the National Bureau of Statistics (NBS).

The data revealed that the average price index for imported food rose sharply to 806.0 in June 2024, compared to 591.0 in the same month the previous year.

This significant rise from the 19.10% recorded in June 2023 is attributed to the depreciation of the naira following the unification of the forex exchange market by the Central Bank of Nigeria (CBN) in June 2023.

This unification aimed at creating a more transparent and efficient market led to a steep decline in the value of the naira.

The NBS report shows a concerning trend of rising imported food costs throughout the first half of 2024. Starting with a high inflation rate of 26.29% in January, the rate climbed to 29.81% in February, 32.89% in March, 34.01% in April, and 34.83% in May before reaching 36.38% in June.

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While there was a slight deceleration from March to May, the inflation rate picked up again in June.

Overall inflation in Nigeria also increased, with the rate rising from 33.95% in May 2024 to 34.19% in June, which is 11.40 percentage points higher than the 22.79% recorded in June 2023. On a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, up from May’s 2.14%, indicating a faster rate of price increase.

Imported food inflation at 36.38% in June 2024 outpaced the overall headline inflation rate. However, general food inflation was even higher at 40.87% for the same period, up from 40.66% in May 2024, and significantly higher than the 25.25% recorded in June 2023.

The month-on-month food inflation rate in June 2024 was 2.55%, driven by increased prices of items such as groundnut oil and palm oil.

The naira’s value continued to decline, closing June 2024 at N1,503.3/$1, a 1.3% depreciation for the month. Since December 2023, the naira has crashed by 40%, contributing to higher local currency costs for goods priced in foreign currencies, including imported foods.

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In response to rising food prices, the Trade Union Congress (TUC) urged the Federal Government to import essential food items.

While Minister of Information Mohammed Idris mentioned the government’s consideration of food importation as a temporary solution, President Bola Tinubu opposed this strategy, emphasizing self-sufficiency and domestic food production.

The International Monetary Fund (IMF) highlighted the acute food crisis in Nigeria and other sub-Saharan nations due to over-reliance on imported foods. To combat rising food inflation, the federal government approved a 150-day duty-free window for importing maize, husked brown rice, and wheat.

However, this policy has faced criticism. Dr. Akinwunmi Adesina, President of the African Development Bank (AfDB), argued that relying on food imports could undermine Nigeria’s agricultural policy.

The National President of the All Farmers Association of Nigeria (AFAN), Arc. Kabir Ibrahim, warned that duty-free importation could erode gains in local production and called for investment in agricultural inputs for a sustainable food system.