Determinant of food inflation in Nigeria

Determinant of food inflation in Nigeria

Author by Dr. Esther Lawal

Journal/Publisher: Uniport Journal Of Business, Accounting & Finance Management

Volume/Edition: 12

Language: English

Pages: 99 - 111

Abstract

The rising food inflation in Nigeria has become a growing concern. This study is an attempt to identify the factors that determine food inflation in Nigeria. Secondary time series data was gathered from CBN Statistical Bulletin and World Development Indictators spanning 1981-2019. The Vector Auto Regressive (VAR) Model  was appled to investigate the relationship between food inflation (CPI) and some of its determinants such as exchange rate, money supply, food import and interest rate in Nigeria. Findings show that food import has a positive relationship food inflation. Exchange rate and money supply also has a positive impact on food inflation. Interest rate has a negative relationship with food inflation.  This study recommends that local production should be encouraged to increase exports and reduce imports to avoid dumping and ensure that food inflation is reduced, thus contributing to economic growth and development. Also, government should create polices that help reduce exchange rate in order to reduce food inflation.


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