Food Inflation to hit Nigeria by 18% following Ukraine War, Insecurity

Renowned economist and the Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has revealed that Nigeria’s food inflation is heading to 18 per cent amid worsening insecurity and global surge in food prices compounded by the Russia/Ukraine conflicts.


Rewane, who disclosed this in an interview with New Telegraph in Lagos, stated that the biggest challenge threatening the survival of Nigeria as a nation was insecurity that is fueling higher food prices, which is currently exacerbating existing macroeconomic issues. According to him, the global surge in food prices is taking a toll on emerging and developing economies, including that of Nigeria and this is an eye opener for the Federal Government in its efforts to manage the country’s economy, especially focusing on agricultural development.


He explained that food accounted for 20 per cent of consumer spending in emerging nations, up to 40 per cent in sub- Saharan Africa and 56 per cent in Nigeria. Rewane noted that prior to the war in Ukraine, most of the countries were grappling with high debt levels, currency pressures and inflation. According to him, five of Nigeria’s seven top import partners are grappling with rising inflation, thereby making it difficult for Nigeria to import food items seamlessly as key import commodity prices have risen significantly. Speaking on the effects of the rising food inflation on the country’s minimum wage, the economist pointed out that average minimum wage in sub-Sahara Africa (SSA) was $116.14, while minimum wage in Nigeria is $72.46.

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He, however, noted that about 40 per cent of income in SSA was spent on food. The FDC boss added that inflation was eroding the real value of minimum wage. He warned government that if household income further depressed, Nigerian consumers would be pushed to the wall. While speaking on commodity outlook for food and beverages, he stressed that grain price sub-index would increase by about 30 per cent in 2022 against an initial forecast of 7.3 per cent. He also said the Russian- Ukraine war had intensified supply shock of wheat to the world, adding that the price of wheat would remain above $400/tonne throughout 2022. Similarly, Rewane observed that the price of corn is expected to surge by 16 per cent in 2022 amid extremely dry weather in South America, coupled with worries about war in the Black Sea region.


The maize prices will remain above $300/tonne until the next U.S. harvest in 2022/23. While highlighting commodity outlook for industrial raw materials, the expert explained that oil prices would remain elevated throughout 2022. That is an average of above $115/barrel. Also, Russia’s invasion of Ukraine will continue to cause disruption in global supply. In addition, OPEC+ (excluding Russia) will continue to raise production. However, production would be lower than the stated targets.

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