The Director of the Centre for Promotion of Private Enterprise and former Director of Lagos Chambers of Commerce and Industry, Dr. Muda Yusuf, has attributed insecurity as the most important factor crippling food production and increasing inflation.

Dr. Yusuf shared his thoughts on the situation in a recent interview with DAILY POST. “The high food prices have a dampening effect on the Sallah festivities. Most food items are completely beyond the reach of many. The entire spectrum of food items is affected,” said Dr. Yusuf.

He attributed the high food prices to several factors, including insecurity affecting farmers, destruction of crops by herders, pest infestations, climate change, and high transportation costs.

“The spiraling cost of food is quite scary. There is a need to do more to ensure the safety of the farming population in the country. The insecurity is the most important factor impacting food production negatively,” he added.

Dr. Yusuf emphasized the role of state governments in improving food security. “The subnationals need to do more to complement the efforts of the federal government. Indeed, the subnationals have much bigger roles to play in promoting food security. The government needs to roll out more fiscal incentives to drive agricultural production. Scaling productivity in the sector is also very crucial.”

The National Bureau of Statistics recently reported that headline and food inflation surged to 33.95% and 40.66%, respectively. Dr. Yusuf expressed concern over the persistent high inflation rates. “It is worrisome that high inflationary pressures have persisted in the Nigerian economy despite some policy measures to tame inflation, especially on the monetary side,” he said.

He identified key drivers of inflation, including the depreciating exchange rate, high transportation costs, logistics challenges, energy costs, climate change, and insecurity in farming communities. Dr. Yusuf stressed the need for urgent government intervention. “Tackling inflation requires urgent government intervention to address the challenges bedeviling production and security in the economy. The real sector of the economy needs to be incentivized to ensure the moderation of production costs.”

Regarding the recent collapse of Heritage Bank, Dr. Yusuf criticized the regulatory authorities for their failure to act sooner. “The progressive degeneration of the health of Heritage Bank over the last few years should not have been tolerated by the apex bank and NDIC in the first place. It smacks of failure of regulation,” he stated.

He warned that the collapse of Heritage Bank has triggered a new confidence crisis in Nigeria’s banking system. “The revocation of the Heritage Bank license had regrettably triggered a new round of confidence crisis in our banking system. There are already speculations about the health of some of the banks. This is most unhealthy for our financial system.”

To address the ongoing foreign exchange market crisis, Dr. Yusuf pointed out that the fundamental issue is a supply crisis. He suggested that improving domestic crude oil production and export, reducing the importation of petroleum products, and boosting non-oil exports could help in the medium to long term.

“Meanwhile, the CBN needs to put in place measures to reduce current volatility in the forex market. The volatilities are inimical to investors’ confidence and they aggravate investment risk,” he concluded.