The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture has said insecurity crisis in the country has significantly affected farming activities and drastically reduced ability to locally produce raw materials for manufacturing purposes.
The association also said Nigeria’s inflationary statistics might be incorrectly underestimated considering the primary research on the price of essential foods, transportation and household goods.
According to a statement by the association, the increase in inflation could be linked to several factors, including the high cost of raw materials, devaluation and the disruption of the supply chain caused by insecurity among others.
The statement said the persistent insecurity in the nation had continued to impede agricultural activities and deterred investments in agriculture in the nation’s food-producing regions, resulting in a decline in agricultural output.
It stated, “The rising level of insecurity has a direct effect on the production capacity of most farmers, with Nigeria having over 80 per cent of the farmers as smallholders.
“These farmers are unable and frightened to do their normal farming due to the security situation in the country, despite the fact that these individuals make a living from farming and contribute significantly to the country’s food supply. In addition, they contributed to the provision of raw materials for food processing and for the majority of agro-allied businesses.”
Consequently, NACCIMA said the entire agricultural value chain had been disrupted due to the restrictions imposed by insecurity.
It stated that it wass conceived that the primary cause of inflation, particularly food inflation, was endogenous.
The statement said most farmers and those earning a living within the value chain had been left unemployed, worsening the spiralling unemployment rate in the country.
According to NACCIMA, Nigeria was currently suffering stagflation as opposed to the widely reported inflation.
The statement read, “The Nigerian economy has shifted significantly into a walking inflation. That is, the country’s economy is too swift for individuals and businesses to sustain.
“It is a well-established fact that Nigeria relies heavily on import of finished goods demanded by households and raw materials used by industry. Ironically, with the proper infrastructures, these items may be produced domestically.”