CBN Cites Addressing Inflation as the Reason for Advocating for Investment in Food Storage Facilities, and Policies to Tackle Supply-side Constraints

The Central Bank of Nigeria (CBN), through its Monetary Policy Committee (MPC) members, has emphasized the critical need for strategic investments in food storage infrastructure and the development of targeted policies to mitigate supply-side constraints, as key measures to combat the nation's persistent inflation. During the February 2025 MPC meeting, members highlighted that Nigeria's inflation challenges are largely structural, stemming from issues within critical sectors like agriculture, infrastructure, and oil. 

Aku Odinkemelu, an MPC member, stressed that the recent rebasing of inflation, which assigns greater weight to core inflation, underscores this reality. He pointed out that core inflation, driven by factors such as transportation, housing, healthcare, and electricity costs, remains stubbornly high and less responsive to traditional monetary policy tools. To address this, the CBN is urged to collaborate closely with fiscal authorities to formulate policies aimed at tackling supply-side shocks and mitigating structural inflationary pressures. Muhammad Abdullahi, another MPC member, specifically advocated for investments in transportation and storage infrastructure for food and agricultural products, noting their potential to significantly reduce food prices and curb food inflation. Aloysius Ordu, another member, suggested that ongoing monitoring of global economic trends, combined with proactive monetary and fiscal policies, and structural reforms, are vital for ensuring long-term economic stability. Bandele Amoo expressed optimism that the implementation of the 2023 Electricity Act would contribute to moderating inflation by addressing the nation's electricity infrastructure deficit. He also noted that the recent decline in the inflation rate following the rebasing exercise indicates a shift towards positive real interest rates.