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Economy

Border Closure: Prices Soar Amid Shortages

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  • Border Closure: Prices Soar Amid Shortages

Prices of goods have gone up in the Nigerian market as lack of supply due to border closure bolstered prices.

Traders in the local market said the shortage of imported food items are fueling the surge in prices of goods across key local markets as sellers are said to be hoarding available goods to sell at a projected higher price around December when prices of Chicken, Rice, etc are expected to skyrocket.

A trader at Ile Epo Market in Lagos, Isa Mohammed, said prices of imported parboiled rice have increased by 100 percent. He said a 50kg bag of rice that was sold between N13,000 and N14,500 in July is now being sold between N24,000 and N30,000.

“Prices of other measures of the same variant have also increased.”

Another rice seller at Isheri Market said rice dealers now sell at a much higher price, forcing them retailers to increase the price they sell to final consumers.

He said, “The 50kg bag of imported rice that we used to sell for about N21, 000 now costs N30, 000. The 50kg bag of local rice that was sold at N16, 000 now costs between N22, 500 and N23, 500.”

“We learnt that the government has closed the borders so the goods cannot come in again.”

Surprisingly, he said the price of local rice has also gone up, suggesting that imported rice has been sustaining the local market, hence why its scarcity impacted price.

Similarly, a woman who sells frozen chicken said the price of Chicken has gone up because of the border closure.

According to her, before the border was closed in August a kilogram of frozen chicken and turkey were N1,300 and N1,400, respectively. That same kg now costs N1,500 and N1,700.

The surge in prices pointed to the fact that Nigeria is still not self-sufficient in rice production as claimed by some lawmakers a few months ago.

It should be recalled that Dangote also closed his Tomato Processing Factory due to insufficient raw materials.

Consumer Price Index, which measures the inflation rate, could surge above the current level of 11.02 percent in the final quarter if the Federal Government refused to open the border.

This would hurt Nigeria’s monetary policy as the Central Bank of Nigeria would have to adjust its monetary policy to regular price increase and at the same time ensure Naira stability.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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