Bismarck Rewane, the Chief Executive Officer of Financial Derivatives, has forecasted a decrease in food prices in Nigeria by September 2024. In an interview with Channels Television on Tuesday, the renowned economist discussed the Central Bank of Nigeria’s recent interest rate increase to 26.75 percent, predicting that inflation will begin to moderate from September.
Rewane anticipates a slight reduction in Nigeria’s inflation rate from the current 34.19 percent to a range of 32 percent to 28 percent by the end of the year. He attributes this expected change to several factors, including the operational commencement of the Dangote Refinery in August, a 150-day suspension of import duties on food, and the introduction of a new minimum wage of N70,000.
He also projected an appreciation of the Naira against the dollar in the foreign exchange market in the coming months.
“This is the inflation spiral. The inflation was increasing sharply, started stagnation now and it is expected to start falling. When I said falling it is not significant. From 34.19 to about 32 percent towards the end of the year to about 28 percent,” Rewane said.
“One of the major stocking factors is logistic cost. It is a good thing that Alhaji Aliko Dangote has come to the rescue. Another thing, now it is a law, N70,000 is the new Minimum wage.
“What does all of this mean to the ordinary man? What we are seeing is that prices of food commodities will drop or are expected to drop if nobody corners it. Rice for example, the current price is N82,000 and will come down to N70,000 by September, Wheat from N59,000 to N50,000, and Beans from N150,000 to N110,000.
“Food import duty waiver will tamper inflation. Dangote Refinery Fuel product will come on August 15th, it will guarantee supply not price. The new Minimum wage will impact inflation only marginally. High interest rates will help increase savings. The Naira will recover from N1,700 per dollar to N1500 in September,” he added.
On Tuesday, the CBN increased interest rates by 50 basis points to 26.75 percent in a bid to address rising core inflation and food inflation, which were at 34.19 percent and 40.87 percent respectively in June 2024. This decision follows the government’s announcement to suspend import duties on food for 150 days as part of its efforts to control inflation.
