The Central Bank of Nigeria (CBN) on Tuesday assured Nigerians that food prices would not accelerate the way people had anticipated in 2022.
The CBN Governor, Godwin Emefiele, said this as he answered questions from the press following the two-day Monetary Policy Committee (MPC) meeting held on Tuesday in Abuja.
The MPC retained the country’s Monetary Policy Rate (MPR) at 11.5 per cent, and also unanimously decided to retain all other monetary policy parameters.
As a result, the Cash Reserve Ratio (CRR) remained at 27.5%, the Liquidity Ratio was retained at 30%, and the Asymmetric Corridor was maintained at +100 and -700 basis points.
Responding to questions after presenting the meeting outcome, Emefiele said the MPC was aware of the challenges of moving food from the farm to the market, and would do everything within its power to stop hoarders from doing so.
CBN is examining the issues involved and will have good stories to tell by the next MPC about the trend, he said.
“We found out that prices at farm gates are in line with our expectations because they are somewhat moderated; However, prices at the markets where our statisticians take their survey are high.
“So, if prices at the markets are high, there is, therefore, some problems between the farm gates and the markets.
“So, we see logistical problems, essentially bordering on transportation, also bordering on maybe destruction of food produce or perishable items from farm to market.
“We are trying to encourage people who are interested in looking at how to resolve the logistical problems of delivering food from farm to market to come in and take advantage of some of the interventions that we have,” he said.
The MPC believes that food prices are likely to rise again at its next meeting, which is why it plans to examine them again.
Emefiele said the MPC is in favour of the Anchor Borrowers program, which began last year, adding that it will moderate food prices and prevent hoarding.
“Luckily, we started a programme last year where we said that for our own repayment of our loans under the Anchor Borrower programs, we will receive the produce into our own silos and our own warehouses and we will dispose of them and sell them to the real end-users.
“Whether it’s the rice millers or the feed millers who need them to produce, so that through that mechanism, we can be seem to be competing with the hoarders in the market to moderate prices,” he said.
He said that it worked well in 2021 because from February to around August of that year, the central bank released 50,000 tons of maize to those it recognized as feed millers.
Additionally, the governor of the CBN said the MPC had brought the Nigerian commodity exchange to life.
A board of independent directors will be established at some point, ensuring that every support needed to play its role as a large commodity exchange that will hold different produce in the country and compete with hoarders will be given to the association.
According to the CBN governor, Nigerians will soon be able to buy a bag of rice at a reasonable price.
“We will aggregate those rice paddies and we will sell them to millers and we would like to appeal to the millers that they should also be considerate.
“We are going to look at every transportation logistic that they are looking at but, Nigerians must receive rice in their plate on their dining tables at moderate prices,” Emefiele said.
