Food inflation: Uwaleke urges FG to partner commodity exchanges

Prof. Uche Uwaleke, the President of Capital Market Academics of Nigeria, 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 newsmen 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 per cent in June 2024.

The NBS stated this in its Consumer Price Index and Inflation Report for June.

The report was released on Monday.

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

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

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

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 that the Federal Government should lease to them, warehouses under the Federal Ministry of Agriculture 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.

The professor said 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.

“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.