According to the World Bank’s current Commodity Markets Outlook report, the declining value of the Nigerian naira is driving up food and gasoline costs, potentially worsening the food and energy crises the country is already facing.
According to the research, most commodity prices have fallen from recent highs in US dollars, owing to fears of a worldwide recession.
It went on to say that the price of Brent crude oil in US dollars declined roughly 6% from the Russian invasion of Ukraine in February 2022 and the end of last month. Nonetheless, due to currency devaluation, about 60% of oil-importing emerging market and developing nations reported a rise in domestic-currency oil prices.
According to the Washington-based bank, nearly 90 per cent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars.
It said elevated prices of energy commodities that served as inputs to agricultural production have been driving up food prices.
During the first three quarters of 2022, studies by the World Bank Group showed that food-price inflation in South Asia averaged more than 20 per cent. Food price inflation in other regions, including Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, and Eastern Europe and Central Asia, averaged between 12 and 15 per cent.