Why Price Of Food Is High, Despite Low Inflation Rate – Dr. Boniface Chizea
A Financial Consultant Dr. Boniface Chizea has attributed the cause of inflation in Nigeria to perennial flooding in Nigeria and displacement of farmers by Boko Haram insurgence in the Northeastern part of the country.
He said this in an exclusive interview with our correspondent, adding that inflation tends to impact more on the salary earner or people at the lower end of the scale.
According to him the current inflation figure released by the National Bureau of Statistics does not reflect the true position of the economy.
“You cannot tell us that inflation is going down and the prices of goods continue to go up,” he said.
He stressed that if hunger is taken away from poverty, it will be manageable and it is a cause for worry when inflation is going down and the price of food items are not corresponding.
He said Nigerians are worried about inflation because it impacts more on the salary earner, the people at the lower end; unlike the entrepreneur who passes on the prices in order to maintain the margin.
He stated that when a salary earner, ask for an increase in salary, there is a timeline of negotiation for the increase of his salary.
He emphasized that when there is inflation, it affects competitiveness, makes one spend so much especially when an environment is changed and it becomes hard to do business in that environment.
He also said flooding as an example in Benue state affects yam production, which reduces the quantity produced, increases price, giving room for inflation.
He gave other examples as inconsistent government policies, the issue of Boko Haram and Fulani Herdsmen in the North as factors responsible for inflation; because it affects farmer’s cultivation and production of food items.
He said the fact remains that agriculture is the mainstay of Nigeria’s economy; considering the number of factors like: employment, food security and its 20% GDP contribution to Nigeria’s economy.
He said further that Nigerians need to talk about going forward, which is diversification of the economy, instituting policies that will check Nigeria, “producing things not consumed and consuming things not produced”, which has been the dilemma.
He concluded with the solution that Nigeria needs to look inwards and consume those things produced here instead of going out to import things that can be produced here and adjust its concentration pattern which will impact on the rate of exchange and the demand of the foreign exchange will begin to respond.