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Food Inflation and the Nigerian Economy: An Empirical Investigation

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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)

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.

Suggested Citation

  • Kwode E. Israel & Gad Charity, 2024. "Food Inflation and the Nigerian Economy: An Empirical Investigation," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(11), pages 3455-3465, November.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:11:p:3455-3465
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    References listed on IDEAS

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    1. Hasan, Amiratul Nadiah & Masih, Mansur, 2018. "Determinants of food price inflation: evidence from Malaysia based on linear and nonlinear ARDL," MPRA Paper 91517, University Library of Munich, Germany.
    2. Chengsi Zhang & Chunming Meng & Lisa Getz, 2014. "Food prices and inflation dynamics in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 6(3), pages 395-412, August.
    3. Sasmal, Joydeb, 2015. "Food price infl ation in India: The growing economy with sluggish agriculture," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 20(38), pages 30-40.
    4. Chengsi Zhang & Chunming Meng & Lisa Getz, 2014. "Food prices and inflation dynamics in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 6(3), pages 395-412, August.
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