The International Monetary Funds (IMF) has suggested fiscal, monetary and structural reforms to reduce food inflation in Nigeria and other Sub-Saharan African countries.
IMF made this suggestion, yesterday, in a report titled: “Africa Food Prices are soaring amid high import reliance”.
The report stated: “We looked more closely at the variation in prices between countries and determined that those with stronger monetary policy frameworks are better at curbing direct and second-round food price inflationary pressures, and in turn, controlling overall inflation.
“In contrast, food prices tend to be higher in countries with weaker fiscal management and elevated public debt.
“These results suggest a mix of fiscal, monetary, and structural reforms could help lower food inflation.”
IMF noted that staple food prices in sub-Saharan Africa surged by an average 23.9 percent in 2020-22, the most since the 2008 global financial crisis.
It stated: “In Nigeria for example, the prices of both cassava and maize more than doubled even though they’re mainly produced locally.
“Using price data from 15 countries on the five most consumed staple foods in the region (cassava, maize, palm oil, rice, and wheat), we find that in addition to global food prices, net import dependence, the share of staples in food consumption, and real effective exchange rates drive changes in local staple food prices.
“Of these, the consumption share of each staple has the largest price effect. This is due in part to income.
“Better-off households can afford a wider range of foods, but for the poor there are very few substitutes for staples, which make up nearly two-thirds of their daily diet.”