KPMG: Tackling Insecurity Vital to Resolving Food Inflation

Ugo Aliogo

Associate Director, Infrastructure Advisory, KPMG, Olasunkanmi Odede, has stated that tackling the current insecurity crisis in the country would be an effective measure in resolving food inflation, noting that based on statistics, food prices have increased as much as almost 50 per cent in the last eight months since the present administration came into power.

Odede, who disclosed this at the KPMG Audit Committee Seminar in Lagos, said when the issue of insecurity is addressed, farmers can go back to the farm, to produce enough food, and then government can begin to solve the logistical issues of getting food from the farm.

He remarked that another issue the federal government needs to address is the rising cost of inputs, adding that some of them are indexed to the US dollars, which links back to the exchange rates, “So, it is a component of fixing insecurity and tackling the exchange rates.”

He hinted that if government is able to address the problems of forex and insecurity and other minor issues, the economy would be fine from an inflation perspective. 

Odede remarked that inflation would still be high, stating that there are no hopes that the inflation rates might drop anytime soon, he however disclosed thatby Q3, or Q4, the economy is going to see some sort of a decline.

According to him, “The truth is that it will take time for the efforts of government to come to fruition.  One of the things that the Central Bank of Nigeria (CBN) is doing, which we saw last week was the increase in Treasury Bills and that was done just to be able to reduce the money supply in the economy.

“The CBN MPC meeting which is coming up soon will give another clarity on the direction of the economy and the interest rates which obviously might have some impacts. Because the inflation in Nigeria is not technical. It is not an interest rate driven inflation. It is more of a cost increase inflation and largely food driven.”