The United States inflation rate rose from 8.6% in May to 9.1% year-on-year in the month of June, the U.S. Bureau of Labor Statistics reported on Wednesday.
The number is higher than the 8.8% projected by economists and the highest since 1981. Indicating that the Federal Open Market Committee’s (FOMC) recent aggressive rate increase has not been effective and could compel the Fed to move even more aggressively.
On a seasonally adjusted basis, inflation for all urban consumers grew 1.3% in June, after rising by 1% in the month of May.
According to the Bureau, the increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors.
The energy index increased by 7.5% over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 percent and the other major component indexes also rising. The food index rose 1.0 percent in June, as did the food at home index.
The persistent increase in inflation rate despite efforts to rein in consumer prices and cool the world’s largest economy is now expected to hurt economic activities further, drag on consumer spending which constitutes 75% of the entire economy, hurt new job creation, retail sales and new orders, especially oversea orders.
With this, the widely projected economic recession is certain and will bolster the U.S. Dollar’s attractiveness even further as investors will look to hold their funds in Dollars to avoid high borrowing costs and better manage the negative impact of inflation.
Nigeria’s Untapped Coffee Sector Holds the Key to $2 Billion Annual Revenue
Amidst declining foreign reserves and the need for alternative revenue streams, Nigeria’s overlooked coffee industry emerges as a potential powerhouse capable of contributing over $2 billion annually to foreign exchange earnings.
Industry experts emphasize the necessity for strategic investments and modernized farming practices to unlock the full economic potential of the coffee sector.
While Nigeria is not among the top 10 coffee producers in Africa, the country’s untapped coffee industry holds the promise of significant financial gains, job creation, and sustainable agricultural development.
The urgency for revitalization comes as Nigeria grapples with a decline in foreign reserves, dropping from $38.25 billion in September 2022 to $33.23 billion in the third quarter of 2023.
Salihu Imam, Chairman of the National Coffee and Tea Association of Nigeria, Oyo State, highlighted the global significance of coffee, stating, “Coffee is the second most traded/valuable of all commodities and first in Agricultural commodities in the world.”
The potential economic impact extends beyond immediate financial gains, with Nigeria positioning itself as a key player in the global coffee trade.
Despite its potential, Nigeria’s coffee exports remain modest, producing less than one million bags annually.
In contrast, Ethiopia, the largest coffee exporter in Africa, is projected to produce 8.25 million bags. Experts suggest that Nigeria, with its unique coffee varieties, could generate $2 billion annually.
Segun Lary-Lean, President of the West Africa Specialty Coffee Association, emphasized the robust global demand for coffee, comparing it to water in Western countries.
He noted the significant earnings of coffee-producing nations like Brazil, Colombia, Vietnam, and Kenya, which experienced a 17% increase in coffee earnings.
In a call to action, industry players urge the Federal Government to prioritize strategic investments, modernized farming practices, and value-added processing to harness the coffee sector’s full economic benefits.
Unlocking the potential of Nigeria’s coffee industry stands not only as a financial opportunity but as a catalyst for broader economic growth and diversification.
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