Food inflation: Uwaleke urges FG to partner commodity exchanges

President of Capital Market Academics of Nigeria, Professor Uche Uwaleke, has urged the Federal Government to engage existing commodity exchanges to achieve food security within the shortest possible period.

Uwaleke made the suggestion in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos while reacting to the June 2024 inflation figure.

According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate increased to 34.19 percent in June 2024.

The NBS stated this in its Consumer Price Index and Inflation Report for June, released on Monday.

According to the NBS, the figure is 0.24 percent points higher than the 33.95 percent recorded in May 2024.

It said on year-on-year basis, the headline inflation rate in June 2024 was 11.40 percent higher than the 22.79 percent recorded in June 2023.

The NBS said in June 2024, food inflation on year-on-year basis was highest in Edo with 47.34 percent, while Nasarawa was the lowest with 34.31 percent.

Commenting on the figure, Uwaleke said the Federal Government should engage commodity exchanges such as AFEX Commodities Exchange and the Lagos Commodity and Futures Exchange on how best to achieve food security.

He said the Federal Government should lease warehouses under the Federal Ministry of Agriculture to them as well as procure grains through the commodity exchanges.

Uwaleke also called on the National Assembly to pass the Warehouse Receipt Bill.

On the policy introduced recently by the Federal Government to tackle food insecurity, he described it as a welcome stop-gap measure, adding that the measure would moderate food inflation if properly implemented.

“I think it is a welcome stop-gap measure aimed at moderating food inflation, which is largely caused by supply constraints occasioned by insecurity in the food belt regions of the country,” he said.

“The reality is that the government needs to buy time to deal with the legacy supply-side factors fueling inflation in Nigeria.

“These legacy factors include insecurity and transport challenges,” he said.

Uwaleke said that the government should intensify efforts to deal with banditry and kidnapping.

“Indeed, any fiscal measure at this time to reduce the high rate of hunger in the land is welcome,” Uwaleke said.

According to Uwaleke, the current inflation in Nigeria is driven largely by supply-side (cost-push factors), which are exogenous to the Central Bank of Nigeria.

“Although taming inflation falls within the remit of the monetary authority, the fiscal side has a major role to play,” he said.

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