Ossom Raphael

The Central Bank of Nigeria (CBN), has blamed the transportation cost as the major cause of the surge in food inflation in the country.

The CBN Governor, Godwin Emefiely, said a wide disparity between the low prices at the Farmgate and high prices at the marketplace, meaning that transport may be a major factor in the surging food prices.

Emefiele, said this on Tuesday while addressing journalists immediately after the first Monetary Committee Meeting (MPC), of the year at the CBN headquarters in Abuja.

He said that the surge in inflation in December was transitionary and was caused by the December festivities.

Emefiele said: “Prices at the farmgate were inline with expectations, however price at the marketplace is high.

“If prices at the moment are high, it means there are some problems between the farm gate and the marketplace. We see logistics problems particularly transport.”

The governor also identified the destruction of the food products as a primary challenge. He stated that the CBN is out to encourage people through interventions and looking to solve the logistics problem of delivering food from farms to markets.

Meanwhile, the MPC unanimously voted to retain the Monetary Policy Rate (MPR), which measures interest rate, at 11.5 per cent.

Emefiele, said the committee voted to maintain the key lending rate at 11.5 per cent, with the asymmetric corridor of +100 and -700 basis points around the MPR and liquidity ratio at 30 per cent while Cash Reserve Requirement was pegged at 27.5 per cent.

“The MPC feels a hold will signal its realisation of the fragility of the growth recovery and its sensitivity to emerging global and domestic uncertainties. Hence, the need to sustain policy trajectory.

“After a careful balancing of the benefits and downsides of each policy ratio, the MPC decided to hold all policy parameters constant,” Emefiele said.

He said the committee believed that the existing monetary policy stance has supported the growth recovery and should be allowed to continue for a little longer for consolidation to achieve the MPC mandate of price stability that is conducive for sustainable growth.