Global Food Price Index Hits 10-Year High In 2021, Rises By 28%
The prices of food reached a 10-year high in 2021, rising by an average of 28 percent, the highest average level since 2011.
The UN’s Food and Agricultural Organization (FAO), in its Food Price Index, disclosed that despite a slight decline in December 2021, there was still an increase of 23.1 percent in points recorded in December 2020.
For 2021 as a whole, the FFPI averaged 125.7 points, as much as 27.6 points (28.1 percent) above the previous year with all sub-indices averaging sharply higher than in the previous year.
Also, the FAO Vegetable Oil Price Index averaged 178.5 points in December, shedding 6.1 points (or 3.3 percent) from recent record highs. This decline, according to the FAO, was driven by weakening palm and sunflower oil prices, while soy and rapeseed oil values remained virtually unchanged month-on-month.
Similarly, International palm oil prices fell in December, primarily reflecting subdued global import demand amid concerns over the impact of rising COVID-19 cases. International sunflower oil quotations were also weaker, reflecting demand rationing.
For 2021 as a whole, the FAO Cereal Price Index averaged 131.2 points, up 28.0 points (27.2 percent) from 2020 and the highest annual average registered since 2012. The prices of maize were however firmer, underpinned by strong demand and concerns over persistent dryness in Brazil.
For dairy products, the price averaged 128.2 points in December, up 2.3 points (1.8 percent) from November and 19.0 points (17.4 percent) above its December 2020 value. Also, the output for milk was low due to high global import demand, coupled with tight export supplies.
However, despite the low milk output, cheese production in Western Europe increased as producers preferred cheese over alternative dairy products, causing a marginal decline in cheese prices.
Sugar Price Index averaged 109.3 points, up 29.8 points (or 37.5 percent) from 2020 and the highest since 2016.
Meanwhile, amid this increase in the global food index, Nigeria’s inflation rates continue to rise. The World Bank had earlier projected that Nigeria may have one of the highest inflation rates globally in 2022.
According to the World Bank, Nigeria is projected to have one of the highest inflation rates globally and the seventh-highest among Sub-Saharan African countries in 2022.
These inflationary pressures, which were triggered by multiple demand and supply shocks could hamper the country’s attempt to achieve economic recovery, eroding the purchasing power of most vulnerable households.
Nigeria and Indonesia Boost Trade Balance by 80.77% in 2022, Unveiling New Economic Opportunities
The figures show an impressive increase of 80.77%, with the trade balance soaring from $2.6 billion in the prior year to a substantial $4.7 billion in 2022.
The Nigerian-Indonesia Chamber of Commerce and Industry has announced a remarkable surge in the trade balance between Nigeria and Indonesia. The figures show an impressive increase of 80.77%, with the trade balance soaring from $2.6 billion in the prior year to a substantial $4.7 billion in 2022.
This revelation was made by Ishmael Balogun, President of the chamber, during the prestigious 2023 Equipment and Manufacturing West Africa Exhibition, held under the theme “Reigniting Manufacturing to Drive Economic Growth and Development” in Lagos.
During the event, industry experts unanimously underscored the pivotal role of technology adoption, human capacity building, and collaboration in revitalizing the manufacturing sector to foster economic growth and development in Nigeria.
In his address, Balogun shed light on the significance of bilateral trade and investment, technological advancements, and global engagement. He emphasized that embracing technology and forging international partnerships would enable businesses to venture into uncharted territories and unlock mutually beneficial opportunities.
Balogun stated, “It is with great pleasure that I inform you about the tremendous growth in the trade balance between Nigeria and Indonesia, which has surged from $2.6 billion in 2021 to $4.7 billion in 2022. Our objective is to continually explore new horizons and expand our outreach further.”
Tumi Adeyemi, Founder and CEO of ZenoLynk Technologies Limited, expressed his views on the matter, emphasizing the critical role of a robust manufacturing base in ensuring self-sufficiency, reducing import dependency, and stimulating exports, thereby bolstering the country’s trade balance.
He highlighted the persistent challenges faced by Nigeria’s manufacturing industry, including inadequate infrastructure, unreliable power supply, limited access to finance, bureaucratic bottlenecks, and inconsistent policies.
According to Adeyemi, leveraging technology is essential to overcoming these obstacles and unlocking growth opportunities for the Nigerian manufacturing sector.
He also pointed out the tremendous potential of the African Continental Free Trade Area agreement, describing it as a golden opportunity for Nigeria’s manufacturing industry. By capitalizing on this vast market of 1.3 billion people and eliminating trade barriers, Nigerian manufacturers can expand their reach, tap into new markets, and boost export-oriented production.
To position Nigeria’s manufacturing sector as a regional powerhouse, Adeyemi called for strategic planning, increased competitiveness, and product diversification. By embracing these measures, the industry can harness its full potential and establish a thriving manufacturing sector that maximizes value addition and reduces dependence on imports.
Abubakar Aliu, the former Director of Industry Trade and Investment, stressed the transformative impact of the African Continental Free Trade Area agreement on promoting industrialization in Africa. He highlighted the immense opportunities it presents for expanding manufacturing capabilities and driving economic growth across the continent.
With the exponential growth in the trade balance between Nigeria and Indonesia, coupled with the commitment of industry experts and stakeholders to embrace technology, enhance competitiveness, and foster collaboration, the future of Nigeria’s manufacturing sector appears brighter than ever. By harnessing the power of technology and strategic planning, Nigeria can position itself as a force to be reckoned with in the global manufacturing landscape, while also contributing significantly to Africa’s industrialization agenda.
Nigeria’s Economy Grows at Slower Pace in Q1 2023 as Cash Crunch Weighs on Productivity
The Nigerian economy grew at a 2.31% pace in real terms in the first quarter (Q1) 2023, according to the latest report from the National Bureau of Statistics (NBS). This represents a 0.8% year-on-year decline when compared to the 3.11% recorded in the first quarter of 2022.
The bureau attributed the decline to the impact of cash crunch experienced across the nation during the quarter under review.
However, growth was driven mainly by the Services sector, which recorded a growth of 4.35% and contributed 57.29% to the aggregate Gross Domestic Product (GDP).
The agriculture sector contracted by -0.90%, below the 3.16% growth recorded in the first quarter of 2022. Although the growth of the industry sector improved to 0.31% relative to – 6.81% recorded in the first quarter of 2022, agriculture, and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to the first quarter of 2022.
In the first quarter, aggregate GDP stood at N51,242,151.21 million in nominal terms, higher when compared to the first quarter of 2022 which recorded aggregate GDP of N45,317,823.33 million, indicating a year-on-year nominal growth of 13.07%.
The Nigerian Oil Sector
Nigeria was pumping crude oil at 1.51 million barrels per day (mbpd) in the first quarter, higher than the 1.49mbpd recorded in the first quarter of 2022 and 0.17mbpd higher than 1.34mbpd pumped in the fourth quarter of 2022.
The sector contracted by 4.21% (year-on-year) in Q1 2023, indicating an increase of 21.83% points relative to the -26.04% recorded in the corresponding quarter of 2022 while growth in the sector rose by 9.18% points when compared to –13.38% filled in the final quarter of 2022. On a quarterly basis, the oil sector recorded a growth rate of 20.68% in Q1 2023.
The sector contributed 6.21% to the total real GDP in the quarter under review, down from 6.63% and 4.34% recorded in the first quarter of 2022 and up from the preceding quarter respectively.
The Nigerian Non-Oil Sector
According to the report, the non-oil sector expanded by 2.77% in real terms in Q1 2023. Representing a decline of 3.30% from the same quarter of 2022 and 1.67% points lower than the final quarter of 2022.
The non-oil sector was driven in the first quarter of 2023 mainly by Information and Communication (Telecommunication); Financial and Insurance (Financial Institutions); Trade; Manufacturing (Food, Beverage & Tobacco); Construction; and Transportation & Storage (Road Transport), accounting for positive GDP growth.
In real terms, the non-oil sector contributed 93.79% to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022 which was 93.37% and lower than the fourth quarter of 2022 recorded as
German Economy Plunges Into Recession as Household Spending Succumbed to Inflationary Pressure
Europe’s largest economy, Germany has plunged into recession as inflationary pressure eroded consumer spending and household income.
The economy contracted by 0.3% in the first quarter of the year following a 0.5% decline recorded in the final quarter of 2022. An economy is said to be in recession if it contracted for two successive quarters.
German economic GDP data showed “surprisingly negative signals,” said Finance Minister Christian Lindner on Thursday. Comparing Germany with other developed economies, the minister said the economy was losing potential for growth.
“I don’t want Germany to play in a league in which we have to relegate ourselves to the last positions,” he said, referring to the forecasts of the International Monetary Fund, which predicted a recession in 2023 only in Germany and Britain among European countries.
However, Robert Habeck, Germany’s economy minister, had attributed the slowdown in growth to the previous exposure to Russia’s energy supply and the decision to cut supply following the breakout of war in Ukraine.
“We’re fighting our way out of this crisis,” Habeck said at an event in Berlin on Thursday.
“Under the weight of immense inflation, the German consumer has fallen to his knees, dragging the entire economy down with him,” said Andreas Scheuerle, an analyst at DekaBank.
Data revealed by Investors King showed German household consumption declined by 1.2% quarter on quarter after price, seasonal and calendar adjustments. While government spending also contracted substantially by 4.9% in the quarter.
“The warm winter weather, a rebound in industrial activity, helped by the Chinese reopening, and an easing of supply chain frictions were not enough to get the economy out of the recessionary danger zone,” ING global head of macro Carsten Brzeski said.
By contrast, investment was up in the first three months of the year, following a weak second half of 2022. Investment in machinery and equipment increased by 3.2% compared with the previous quarter, while investment in construction went up 3.9% on quarter.
There were also positive contributions from trade. Exports rose 0.4%, while imports fell 0.9%.
“The massive rise in energy prices took its toll in the winter half-year,” Commerzbank chief economist Joerg Kraemer said.
A recession could not be avoided and now the question is whether there will be any recovery in the second half of the year.
“Looking beyond the first quarter, the optimism at the start of the year seems to have given way to more of a sense of reality,” Brzeski said.
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