Insecurity and Food Prices: Why Nigeria’s CBN Must Target the Real Enemy

Nigeria’s economy presents a confusing picture. Macroeconomic indicators suggest progress – inflation supposedly eased, the Naira appears more stable, and sovereign ratings have seen upgrades. Yet, the lived reality for many Nigerians paints a starkly different scene. Food prices remain stubbornly elevated, eroding purchasing power, while widespread insecurity cripples the agricultural sector. This casts a shadow over any optimistic economic forecast.

The Central Bank of Nigeria (CBN), as it holds its 303rd Monetary Policy Committee (MPC) meeting, faces a genuine challenge. Should the committee respond to these glimmers of macroeconomic improvement with further monetary easing? Or should it acknowledge that the real driver of instability isn’t purely monetary, but rather deeply embedded structural issues like insecurity and a failing food supply chain?

It appears that despite some favorable macroeconomic conditions, Nigeria’s primary inflationary threat comes from insecurity-induced food inflation – a problem that remains largely unaddressed. Unless the MPC makes this its central concern, monetary policy will continue to miss the mark. I’ve witnessed this kind of disconnect before; chasing numbers while ignoring the underlying reasons simply doesn’t work.

A Dip in Inflation, But Hardly Any Relief

The National Bureau of Statistics’ latest Consumer Price Index (CPI) report showed a drop in inflation for the second month running, falling substantially from 18.02 percent in September to 16.05 percent in October – a 44-month low. A new CPI base year along with a slight drop in food costs seemingly contributed to this moderation.

However, while headline inflation slowed, month-on-month inflation actually climbed from 0.72 percent to 0.93 percent, underscoring continuous price pressure at the household level. Nigerians still struggle with rising costs for food, transport, energy, housing, and basic necessities.

The Organised Private Sector (OPS) has voiced its reservations. While welcoming the reported drop, it quickly pointed out that it doesn’t reflect everyday experiences.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, encapsulates the contradiction: “The sharp moderation in October inflation is a significant win. Still, the full welfare benefits are yet to be felt due to persistent structural constraints, especially in food supply, transportation, energy, housing, and essential services.”

These “structural constraints” overwhelmingly trace back to insecurity, a silent but devastating force disrupting agricultural production and distribution nationwide. It’s the elephant in the room that monetary policy seems to be tiptoeing around.

Food Inflation: The Heart of the Matter

Food inflation constitutes Nigeria’s most pressing and persistent economic problem. Even with the recent headline easing, food prices remain unnaturally high.

Eke Ubiji, Director-General of the Nigerian Association of Small and Medium Enterprises (NASME), questioned the inflation data’s connection to reality: “Go to the market now. A half-bag of rice costs between N30,000 and N40,000. Previously, a full bag was around N20,000. Are we really moving forward?”

This isn’t just an isolated incident; it reflects the daily struggles of millions. Food inflation has remained structurally high for nearly half a decade. Its root cause isn’t just excessive money printing; it’s escalating insecurity.

Across key food-producing areas like Benue, Plateau, Niger, Kaduna, Katsina, Zamfara, Taraba, Kebbi, and Sokoto, farmers can’t access their lands due to:

Banditry Terrorist attacks Conflicts between herdsmen and farmers Kidnapping for ransom Destruction of crops and storage Extortion by criminal groups

Consequently, the MPC’s actions, regardless of how well-intentioned, have a limited impact. Tightening monetary policy can’t stop attacks on farmers. Interest rate adjustments can’t clear roads blocked by conflict. Liquidity controls can’t revive rural markets emptied by fear.

Femi Egbesola, President of the Association of Small Business Owners of Nigeria, voiced a similar sentiment: “All of this hasn’t translated to tangible results. It has been very tough, and it is getting tougher.”

Without addressing insecurity, food inflation will continue to undermine any macroeconomic progress.

The Private Sector Perspective: Relief Remains Elusive

A consistent message resonates across private-sector groups: inflation numbers are improving, yet economic hardship remains.

SMEs are closing due to high costs. Consumer buying power is plummeting. Operational expenses remain elevated. Food remains largely unaffordable.

Ultimately, for Nigeria to truly experience macroeconomic stability, the CBN’s MPC must prioritize addressing the root causes of food inflation, namely, the pervasive insecurity crippling the nation’s agricultural sector. Monetary policy alone cannot solve a problem rooted in violence and instability. The MPC needs to push for coordinated action with other government agencies to tackle insecurity head-on. Until then, any gains on the macroeconomic front will remain superficial and disconnected from the daily realities of Nigerian households and businesses. It’s time to target the real enemy to achieve actual progress.