Analysts in the commodity market have projected that food prices will increase and production will also decrease on the back of election spending and early planting season.
As at the beginning of the year, food inflation declined marginally from 19.4 per cent in December to 18.9 per cent in January, according to the National Bureau of Statistics (NBS) data.
Analysts expects inflation to pick up from its 15.13 per cent recorded in January from the (NBS) to higher rate in the later part of the year as election spending could spike the demand for food.
“As we approach election, we expect that from the half of the year inflation rate should begin to look up. It will take a new turn from the decline we have been experiencing in the past few months”, said Ayodeji Ebo, MD, Afrinvest, a Lagos-based financial advisory.
Pre-election activities starts from middle of the year till early next year, there is a concern that government will be distracted from their objective of putting more attention to agriculture and this will affect agricultural production.
“Election year is a critical year for agricultural sector. There will be less focus on productivity. There will be a lot of distractions from the government. Monitoring and evaluation will drop drastically because everyone is focusing on elections and not operations”, African Farmer Mogaji, CEO, X-Ray Farms Consulting Limited said.
“As party primaries starts in the middle of the year, attention will be more focused on campaigns and may likely affect the government targets for the year”, Dolapo Ashiru, CEO, Mega Capital financial services limited said.
Yemi Kale, Statistician General, National Bureau of Statistics (NBS) said that now the harvest season is over and planting has started, there is usually pressure on food prices.
“I think that food prices might come up a little bit in the near term,” said Kale.
BUNMI BAILEY
