Nigeria’s Inflation: Getting to the Meat of the Matter

Tomato prices that fluctuate with the seasons are normal in Nigeria, but the record annual pace of food inflation, which hit 41% in May, is not. Most pinched are the poor. Staples such as beans and maize cost 400% more than they did a year ago, while a 100kg bag of sorghum has more than tripled in price. Since wages have barely moved, the result is a deepening food crisis. Much of the blame should be heaped on the government. A haphazard introduction of new banknotes under the previous administration led to a shortage of legal tender. This caused most hardship in the countryside, where penetration of bank or mobile-money accounts is lowest. With cash scarce, farmers charged middlemen a premium if they used electronic payments, pushing up prices in the markets.

THE ECONOMIST