Uche Usim, (Abuja) and Chinwendu Obienyi
Contrary to claims by the Senior Special Assistant to President Muhammadu Buhari on Media and Publicity, Mallam Garba Shehu, that prices of food items are on the decline, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, on Monday admitted that food prices are indeed on the increase.
The Presidential spokesman, who last week said that food prices were on the decline, even berated a Channels Television guest for saying otherwise.
Shehu had said, “We sat through the meeting of the National Food Security Council and we heard presentations by experts – people who had surveyed the markets.
“As of yesterday (Thursday the morning of the meeting), go and check the indexes in markets. For instance in Kano, millets that had gone up to N24,000 has now gone down to N12,000 or N13,000. Rice that had been N25,000 is now N20,000. Corn, maize is now N18,000 for the old stock and N14,000, N15,000 for the new stock,” he said.
However, in her own assessment of the cost of living in the country, Ahmed, who spoke on NTA’s ‘Good Morning Nigeria’ programme, noted that unlike in previous administrations where subsidy was done on consumption, it would be better if it is targeted at certain sectors of the productive economy.
She said: “It is true that food prices are going up and, as I said earlier on, sensible subsidy is the one that is done on production, not on consumption because when you use gasoline in your car, you burn it and you have to put it in your car again and burn it. “But if you now change the regime and say any truck that carries food or produce, the diesel price is subsidised, you are subsidising production because it means food items get to the market cheaper. Therefore as long as you are subsidising consumption, whether it is fuel or electricity, there will always be the propensity for gain in the system and then there is always the fact that you are subsiding everybody and it is not everybody that needs it.” According to the minister, it was unlikely that the prices of food would rise further because of the increase in the price of petrol, because most trucks conveying agricultural produce use diesel and not petrol.
The discordant tones by Nigeria’s administration officials came on the heels of last week’s forecast by the Central Bank of Nigeria (CBN) that headline inflation might hit the 14.15 per cent mark by end of December 2020.
This was as latest figures released by the National Bureau of Statistics (NBS) had shown that the Consumer Price Index, which measures inflation rate rose to 12.82 per cent year-on-year in July 2020. The 12.82 per cent inflation rate is about 0.26 percent points higher than the 12.56 per cent recorded in June this year and the highest inflation rate Nigeria was recording in the last 29 months.
The last time Nigeria’s inflation was as high as that was in March 2018 when the country’s CPI was put at 13.34 per cent.But even while the August inflation rate is being expected, Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, had predicted that the nation’s inflation is expected to continue in the short run up to the end of 2020.
Meanwhile, CBN has said that the outlook for the economy remains mildly optimistic. “Headline inflation is expected to hover around 13.97 and 14.15 per cent at end of December 2020, owing to: supply shocks which may likely happen due to decline in economic activities globally as a result of COVID-19 pandemic; demand shocks emanating from domestic and international lockdowns; food supply shocks associated with non-tariff monetary, credit, foreign trade and exchange guidelines for fiscal years 2020/2024 border protection and effect of the implementation of the new budget and minimum wage,” CBN said.