The Africa Development Bank (AfDB) on Thursday said the continuous surge in food inflation may likely threaten the 3.2 per cent 2024 growth projection for Nigeria.
THE WHISTLER had reported that food inflation in June rose to 40.87 per cent while the headline inflation increased to 34.2 per cent.
The lead economist , Nigeria Country Department, AfDB Jacob Oduor, said inflation was a major issue in Nigeria, as it remains higher than the West African average and African average. This, he said, will continue to affect food production, agricultural production, as well as oil production
According to him, “So looking forward into 2024, 2025, growth is expected to improve in 2024 to 3.2 and 3.4 in 2025. But this growth, even though is better, is still lower than the West Africa average and the African average.
“So what we see currently with the escalation of persistent inflation and escalation of food prices, which are expected to dampen consumption, are probably going to be issues that may dampen this growth further.
“We also expect to see further pressure on the exchange rates, which have implications again on imported inflation with a high import bill being transmitted into the consumption basket of the general population.
“So generally, policy measures to foster high and resilient growth in the short term, currently the tight monetary policy in place should be maintained, but just cautiously not to increase the monetary policy rate too fast and too further, because that has implications on credit and that feeds back into production costs.
“And then secondly, as the reforms take shape, there’s need also for social protection, influencing those who are vulnerable and those who are adversely affected. But here also targeting of beneficiaries is important, so as to ensure social benefits only go to those who merit it”.