Domestic food price inflation has exerted a substantial impact on nations across Africa, North America, and Latin America as highlighted by the recent report of the World Bank. Nigeria along with various other countries within these regions have been particularly affected by the issue of inflation. The multilateral lender, in its recent Food Security Update (FSU), highlighted that a majority of low-income nations in these regions, amounting to 61.9 percent, faced an inflation rate above 5 percent.
This was mentioned alongside the fact that there still persists significant inflation in domestic food prices. The recent update on FSU highlights the upward trajectory of various indices. The agriculture, cereal, and export price indices witnessed a noteworthy increase of 2 percent, 6 percent, and 1 percent respectively. In addition, maize and wheat prices observed a substantial rise of 8 percent and 14 percent each. There is a projected demand for agricultural products in the coming marketing season.
A significant level of inflation continues to impact domestic food prices.
In the approaching 2023/24 marketing season, the projected demand for agricultural products is expected to soar to unprecedented heights, as mentioned earlier. This revelation remains unchanged, even in light of the sluggish nature of the worldwide economy. A significant level of inflation continues to impact domestic food prices. Low-income countries face inflation rates surpassing five percent in 61.9 percent of cases, while the percentage rises to 76.1 for lower-middle-income countries. Additionally, 50 percent of upper-middle-income countries experience similar inflation, and a substantial 57.4 percent of high-income countries are affected as well.
According to the report, a significant impact is observed in numerous regions around the globe including Africa, North America, Latin America, South Asia, Europe, and Central Asia. The report further suggests that in the majority (74 percent) of the 167 countries for which data is accessible, food price inflation has surpassed the overall inflation rate. Countries reacted strongly after Russia invaded Ukraine, resulting in a dramatic increase in trade-related policy measures, as described in the report.
Nigeria experienced a noteworthy surge in food inflation.
Countries have exacerbated the already dire global food crisis by imposing more and more restrictions on food trade. Their intentions may be to boost domestic supply and lower prices, but this approach has only worsened the situation. The National Bureau of Statistics recently unveiled their report titled Consumer Price Index: November 2023. It revealed that Nigeria experienced a noteworthy surge in food inflation, with the rate reaching a staggering 32.84 percent. This alarming increase occurred merely two weeks ago.
Also, food prices experienced the greatest increase in Kogi, Kwara, and Rivers, with an alarming surge in food inflation observed in all three states, reaching 41.29%, 40.72%, and 40.22% consecutively. In November 2022, there was a notable surge in the food inflation rate, surpassing the previous recorded rate by a significant 8.72 percentage points, amounting to 24.13. According to the findings outlined in the report, the escalation in food costs can be attributed to hikes in the prices of essential food items.
Significant increase in the food inflation rate for November 2023.
These food items include bread and cereals, oil and fat, potatoes, yam, and other tubers. Furthermore, the report highlights that the cost of fish, fruit, meat, vegetables, and beverages like coffee, tea, and cocoa have also contributed to this upward trend. According to the NBS, there was a significant increase in the food inflation rate for November 2023 compared to the previous month. The rate rose by 0.51%, reaching 2.42%. This marks a notable difference from October 2023, where the rate stood at 1.91 percent.