The food and energy crisis in Nigeria will intensify as the naira falls, according to W'Bank

According to the World Bank's most recent Commodity Markets Outlook report, the declining value of the Nigerian naira and the currencies of other emerging economies are raising food and gasoline costs in ways that could exacerbate the food and energy crises that many of them already face.

According to the research, prices for the majority of commodities have dropped from their recent peaks in US dollars amid worries about a coming global recession.

The price of Brent crude oil in US dollars declined by almost 6% between the Russian invasion of Ukraine in February 2022 and the end of last month, it was also stated. However, due to currency depreciations, domestic oil prices rose in over 60% of the oil-importing emerging market and developing nations during this time.

The Washington-based bank estimates that in roughly 90% of these economies, the spike in wheat prices in local currencies was greater than the rise in U.S. dollars.

It claimed that rising energy commodity costs, which were used as inputs in agricultural production, were responsible for raising food prices.

"During the first three quarters of 2022, studies by the World Bank Group showed that food-price inflation in South Asia averaged more than 20 per cent. Food price inflation in other regions, including Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, and Eastern Europe and Central Asia, averaged between 12 and 15 per cent."

Reference

Punchng, 'Naira depreciation’ll worsen Nigeria’s food, energy crisis — W’Bank' (online, 2022) https://punchng.com/naira-depreciationll-worsen-nigerias-food-energy-crisis-wbank/