The International Monetary Fund has alerted Nigerians to a possible increase in food prices/ risks come 2023 due to recent floods and high fertilizer prices.
The National Bureau of Statistics says food inflation hit 23.72 percent on a year-on-year basis in October 2022, with inflation on certain food items rising to between 50 – 100 percent.
Despite that, the IMF has predicted that recent floods have affected agricultural productivity, saying that food prices would worsen in 2023.
The Washington-based lender disclosed this in its ‘Nigeria: Staff Concluding Statement of the 2022 Article IV Mission’ report seen by our correspondent at the weekend.
It said, “The effects of recent flooding and high fertilizer prices could become more entrenched, negatively impacting both agricultural production and food prices in 2023.
“Similarly, further volatility in the parallel market exchange rate and continued dependence on central bank financing of the budget deficit could exacerbate price pressures. In the medium term, there are downside risks to the oil sector from possible price and production volatility, while climate-related natural disasters pose downside risks to agriculture.”
Furthermore, it added that despite Nigeria’s limited direct exposure, the war in Ukraine was affecting the nation through higher domestic food prices.
The IMF said high food insecurity was compounding the pandemic’s effect on Nigeria’s vulnerability.
