CBN Governor Explains Reason Food Items Are Expensive in Nigeria

• The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said the Nigerian government is responsible for inflation
• He said the various palliative initiatives of the federal government, which purchases high items, are to blame for food inflation
• He said that despite the measures taken by the CBN to address inflation, food inflation has remained stubborn 

Legit.ng's Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said that the massive purchase of food items for the Nigerian government's palliative is contributing to the rising food inflation in the country.

Cardoso stated this during the March Monetary Policy Committee (MPC) meeting, published on the apex bank's website.

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CBN increases interest rate to control inflation

The MPC raised the benchmark interest rate to 24.75% from 22.75%, which it said was to tackle high inflation.

However, Nigeria's inflation rate raced to 33.2% in March, with food inflation hitting 40.01%, a yearly increase of 15.56 percentage points from 24.45% recorded in March 2023.

The National Bureau of Statistics (NBS) said the rising prices of items such as garri, millet, yam tuber, water yam, and others could cause the surge in food inflation.

The Nigerian government approved N5 billion for each state and the Federal Capital Territory following the removal of petrol subsidy to enable them to purchase food items for distribution to people experiencing poverty.

The CBN governor noted that inflationary pressure had failed to thaw despite the rise in interest rates in February.

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CBN governor reveals reason food inflation remains high

According to Cardoso, inflationary pressure remains high despite notable stability in the FX market, which results from decisions made at the MPC meeting.

Punch reports that the CBN boss further said that the fiscal authorities better handled the new sources of inflation to complement monetary policy efforts.

Bala Bello, another MPC member, said both food and core inflation increased in February 2024, underpinning the rise in headline inflation to 31.70% from 29.90% in the previous month.

"Inflation is currently unacceptably high and requires decisive and coordinated efforts to curb it, given its adverse impact on citizens' purchasing power, investment decisions and broad output performance," he said.

Bala stated that the federal government's programmes addressing food insecurity, such as releasing grains from the strategic reserves, distributing seeds and fertilisers, and supporting dry-season farming, are essential and commendable.

CBN fintech to suspend account opening

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Legit.ng previously reported that four financial technology companies have suspended account openings following Know Your Customer (KYC) challenges.

Two payment companies, Opay and PalmPay, and two digital microfinance banks, Kuda Bank and Moniepoint, suspended account opening in light of the new KYC regulation ordered by the Central Bank of Nigeria (CBN).

The development comes two days after the Economic and Financial Crimes Commission (EFCC) blocked about 1,146 accounts in unauthorised forex dealings.

Source: Legit.ng