The International Monetary Fund (IMF) has prescribed a mix of fiscal, monetary, and structural reforms to help lower soaring food inflation in Nigeria, Ghana, and other countries in sub-Saharan Africa.
The multilateral lender declared that food prices tend to be higher in countries with weaker fiscal management and elevated public debt. The IMF said it noted that those countries with stronger monetary policy frameworks are better at curbing direct and second-round food price inflationary pressures, and in turn, are better at controlling overall inflation.
The IMF stated that global factors were partly to blame for the rising food prices because the region imports most of its top staple foods, such as wheat, palm oil and rice, among others.
Meanwhile, the Central Bank of Nigeria has raised interest rates for local bank lending to 15.5%, its highest level yet, just two months after it was pegged at 14%. The bank’s governor Godwin Emefiele said the monetary policy committee voted unanimously to raise the rate after deliberating on the impact of the widening margin between policy rate and the inflation rate.
Nigeria’s economy continues to struggle amid dwindling reserves and poor foreign exchange earnings.