The International Monetary Fund (IMF), has stated that due to the ongoing war between Russia and Ukraine, food inflation in Nigeria and other countries, will be sustained till 2023.
In its ‘World Economic Outlook: War Sets Back the Global Recovery April 2022,’ report, where it made this known, the Washington-based lender said inflation is expected to remain high, and far longer than it had previously forecasted.
The report by IMF read: “With the impact of the war in Ukraine and broadening of price pressures, inflation is expected to remain elevated for longer than in the previous forecast.
“The conflict is likely to have a protracted impact on commodity prices, affecting oil and gas prices more severely in 2022 and food prices well into 2023 (because of the lagged impact from the harvest in 2022). For 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging market and developing economies—1.8 and 2.8 percentage points higher than in the January World Economic Outlook.
“Inflation in 2023 is projected at 2.5% for the advanced economy group and 6.5% for emerging market and developing economies (0.4 and 1.8 percentage points higher than in the January forecast). However, as with the growth outlook, considerable uncertainty surrounds these inflation projections.”
Meanwhile, World Bank had previously highlighted the major drivers of food inflation in Nigeria.
While predicting that the ongoing war in Ukraine would worsen food inflation in the West African country, World Bank explained that import restrictions and a nonflexible exchange rate management are the primary drivers of food prices.
“Rising food prices are the underlying factor behind the surge of headline inflation in Nigeria. Food prices have increased due to import restrictions and a nonflexible exchange rate management.
“The current regime is keeping the official exchange rate of the naira artificially strong while the naira has weakened significantly on the parallel market. Additionally, the central bank has restricted importers’ access to foreign currency for 45 products and has reduced the supply to other importers,” World Bank explained in its recent report.
