According to research by Dr. Babatunde Adesanya, an expert in development economics, econometrics and quantitative economics at the University of Abuja, fluctuations in global oil prices and exchange rates have a significant impact on food prices in Nigeria. There is.
Adesanya’s research, titled “Empirical Analysis of the Impact of International Price Transmissions on Domestic Food Price Fluctuations in Nigeria: 2000 to 2019,” is an important study of the factors driving food price fluctuations in Africa’s most populous country. provides insight.
This follows World Food Day, scheduled to be held on October 16, 2024, with the theme ‘The right to food for a better life and a better future’.
According to Adesanya, over the past two decades, international food prices, oil prices and exchange rates have had a significant impact on food price fluctuations within Nigeria, thereby causing food inflation.
His findings revealed that while global food prices may not have a direct impact on domestic food price fluctuations, changes in oil prices and exchange rates do have a significant impact.
“Oil plays a critical role in many stages of agricultural production, from powering farm machinery to making fertilizer to supporting food transportation.
Adesanya, an expert in econometrics, quantitative economics and development economics, said: “When oil prices rise, the cost of producing and distributing food will inevitably rise, contributing to price fluctuations.” said.
Nigeria is currently suffering from soaring prices, especially food, which is depleting household disposable income and increasing hunger and poverty levels.
According to data from the National Bureau of Statistics (NBS), consumer prices were 32.15% in August, while food inflation was 37.52% during the same period.
This is despite the fact that prices have fallen for two consecutive months since peaking at around 40% in June 2024.
According to a United Nations report, approximately 22 million Nigerians will face food insecurity in 2023, and approximately 82 million of the population will go hungry.
This is according to the latest data from the Global Hunger Index (GHI), which ranks Nigeria 110th out of 127 countries in the first half of 2024, which is a drop from the 2023 ranking and the eighth place since 2015. This reflects a decline in ranking.
However, Nigeria’s GHI score rose to 28.8 from 28.3 in 2023, placing the country’s hunger level in the ‘severe’ category.
Mr. Adesanya stressed the importance of consistent implementation of well-thought-out macroeconomic policies in ensuring food security for a country of over 200 million people.
“Achieving affordable food and food market stability will not only strengthen households’ long-term planning, but also strengthen budgetary discipline,” he said.
“Achieving household food security improves welfare and enables more household members to contribute to economic growth and development.”
As Nigeria continues to battle rising food costs and their impact on household welfare, Adesanya’s research provides valuable insights for policymakers and stakeholders in the agricultural sector.
His research highlights the complex interplay of global and local factors in the formation of food prices and provides a roadmap for building a more resilient and stable food system in Nigeria.
Adesanya recommends developing a national food price volatility index to help policymakers monitor and respond to price fluctuations.
University of Abuja academics believe that strengthening the country’s oil sector by privatizing surplus refineries to produce agricultural inputs, as well as boosting domestic food production through investment in research and infrastructure, could also help end the food crisis. He pointed out that this is an important step.
Furthermore, it advocates improving market integration by stabilizing prices and reducing volatility through investments in infrastructure and the adoption of market-based trade policies.
