Food Inflation and the Nigerian Economy: An Empirical Investigation

Kwode E. Israel and Gad Charity
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Kwode E. Israel: Department of Accounting, Business Administration and Economics Admiralty University of Nigeria
Gad Charity: Department of Accounting, Business Administration and Economics Admiralty University of Nigeria

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 11, 3455-3465

Abstract: The persistent rise in food price inflation has negative implications on the growth of the Nigerian economy- standard of living, purchasing power of households and the general wellbeing of the citizens. Food Inflation in Nigeria averaged 13.72 percent from 1996 until 2024, reaching an all-time high of 40.87 percent in June of 2024 (NBS 2024) despite government’s effort and necessary steps to reduce price hike of foods and minimize the effects of higher prices on the citizen. Therefore, the study main objective is to evaluate the impact of food inflation on Nigeria’s economy. This study conducted an in-depth investigation using multiple regression analysis (E-View 10) to analyze data from CBN and NBS covering 1990 to 2023. The result revealed that Food Inflation had negative impact on the Nigerian Economic Growth in the period of 1990-2023. This is because GDP (0.2817), Exchange Rate (0.3684), Interest Rate (0.0000) and as well as Inflation (0.0733) cumulatively accounted for about 63.4% of the variation in the Food Price Inflation (FPI) that further impacted negatively the Nigerian Economy. Based on findings, the study recommended government should embark on mechanized production of local food, reduction of post-harvest losses, food price stabilization and robust monetary and fiscal policies target at food inflation.

Date: 2024
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