Food prices in one of the poorest countries in the world, Zimbabwe rose by 309% in the month of July, according to data from the country’s statistics office.
In June, food inflation grew by 224.80% while the headline inflation stood at 256.90% amid persistent increase in prices of goods and services despite efforts to contain escalating prices and cool the economy.
Explaining the reason for the country’s inflation challenges, Mthuli Ncube, finance minister, said the ongoing Russia-Ukraine war dragged on the already fragile economy to create price instability via currency volatility.
He said the Ukraine war “coupled with our historical domestic imbalances, has created challenges in terms of economic instability seen through the currency volatility and spilling over into price volatility.”
Many Zimbabweans can no longer afford three square meals. Even the country’s working class are complaining.
In June, the Progressive Teachers Union of Zimbabwe took to Twitter to complain about how teachers can no longer afford bread and other basics.
In the tweet, the teachers said we “can no longer afford bread and other basics, this is too much.” Therefore, the nation’s three largest teachers’ unions are calling on the government to start paying teachers in U.S. dollars and the continuous decline in their local currency value has eroded their salaries’ monetary value or purchasing power.
“Because of high inflation, the local currency is collapsing,” economic analyst Prosper Chitambara told The Associated Press. “Individuals and companies no longer trust the local currency and that has put pressure on the demand for U.S. dollars. The Ukraine war is simply exacerbating an already difficult situation.”
The story is not different in other African countries where many nations are grappling with record-high inflation. In Nigeria, inflation rose to a 17-year high of 19.64% in July while food inflation stood at 22.02% amid wide foreign exchange rates, herder crisis, insecurities and other inconsistent policies.
Ethiopia has the second highest food inflation after Zimbabwe, according to Investors King research. Food inflation stood at 35.5% in the East African nation in July.
While Rwanda, Africa’s cleanest country, came third with 32.7%. Ghana and Malawi are not any better with 32.3% and 31.2%, respectively. See other details in the table below.
List of African Countries’ Food Inflation Rates
|S/N||Countries||Inflation Rate %|
Nigeria’s Per Capita Debt Skyrockets: Each Nigerian Now Owes N396,376.19
The National Bureau of Statistics (NBS) has released a sobering report on the country’s public debt, revealing that each Nigerian citizen now carries a heavy financial burden of N396,376.19 in terms of debt per capita.
The NBS’s report paints a grim picture of Nigeria’s fiscal landscape, showing that the nation’s total public debt has surged by 75.27 percent from N49.85 trillion in the first quarter of 2023 to N87.38 trillion at the close of the second quarter of 2023.
In plain monetary terms, this represents an alarming increase of N37.53 trillion in a mere three months.
To calculate the debt per capita, the Independent Corrupt Practices and Other Related Offences Commission (ICIR) divided the total public debt by Nigeria’s estimated population, which stands at approximately 220.4 million, according to the World Poverty Clock.
Breaking down the debt by categories, it was revealed that the federal government’s total external debts amounted to a substantial N29.9 trillion, with the 36 states and the Federal Capital Territory collectively carrying N3.35 trillion in external debt.
On the domestic front, the federal government’s debt reached a staggering N48.31 trillion, while the states and the Federal Capital Territory collectively owed N5.82 trillion.
A notable portion of this debt comprises the N22.71 trillion in Ways and Means Advances extended by the Central Bank of Nigeria (CBN) to the federal government.
It’s worth noting that these figures also encompass new borrowings made by both the federal government and sub-national entities from local and external sources.
The Ways and Means Advances, a financial mechanism employed by the federal government in times of emergencies, allows for short-term loans from the CBN.
However, these loans are restricted by Section 38 of the CBN Act which stipulates that the loan should not exceed five percent of the country’s previous year’s actual revenue.
It has been reported that CBN’s lending in this regard exceeded the Act’s limits, extending loans of $49.2 billion to the previous government.
According to the NBS, as of the end of June 2023, the domestic debt stood at an alarming N54.13 trillion (equivalent to $70,264.58 million), while the external debt reached N33.25 trillion (equivalent to $43,159.19 million).
A closer look at the regional debt distribution reveals that Lagos State carries the heaviest domestic debt burden in Q2 2023, with an eye-watering N996.44 billion.
Delta State follows closely behind with N465.40 billion, while Jigawa State finds itself at the other end of the spectrum with the lowest domestic debt of N43.13 billion, just ahead of Kebbi State with N60.94 billion.
The alarming debt per capita figure underscores the urgent need for Nigeria’s policymakers to address the nation’s fiscal challenges and implement prudent financial management strategies. As the nation grapples with this daunting burden, the path to economic stability and prosperity appears more challenging than ever.
Dollar Shortage Sparks Concerns Among Oil Marketers Over Fuel Importation
Expectations soared when oil marketers championed the removal of fuel subsidies and deregulation of Nigeria’s downstream sector.
However, months after the removal of subsidies and deregulation, concerns are growing about the potential resurgence of the country’s perennial fuel scarcity.
While President Bola Tinubu’s pronouncement in May marked the end of fuel subsidies, the Nigerian National Petroleum Company Limited (NNPCL) still monopolizes petrol importation despite the anticipated influx of independent oil marketers.
Emadeb Energy imported 27 million liters of petrol in July, but since then, independent marketers have struggled to secure imports, leaving NNPCL as the sole importer.
This monopoly undermines the sector’s deregulation, enabling NNPCL to set prices, raising concerns of renewed fuel scarcity.
Marketers attribute their hesitance to forex scarcity and rising international crude oil prices. The challenge deepens as oil prices surge to $94.95 per barrel, and the exchange rate reaches N770/$.
With Nigeria’s fuel prices skyrocketing from N180-200 per liter to N614-700 per liter after subsidy removal, many worry they might breach N720 per liter due to currency devaluation and global oil price hikes.
Dangote’s long-anticipated 650,000 barrels per day refinery, initially set for August, now promises hope to ease the crisis.
Experts advise diversifying focus to existing refineries, particularly Port Harcourt, rather than relying solely on Dangote’s private venture. This would curtail importation costs and reduce vulnerability to market volatility.
While Nigeria navigates these challenges, it remains crucial to bolster domestic refining capacities and ensure energy security, shifting from dependence on imports to sustainable local production.
Rising Cooking Gas Prices Raise Concerns in Ogbaru, Anambra State as 1kg Cost ₦900
Residents of Ogbaru in Anambra State are feeling the pinch of skyrocketing cooking gas prices with a 1kg cylinder now costing a staggering ₦900, leaving many questioning the state of governance and the impact on their daily lives.
The abrupt price hike in cooking gas has left residents in a state of bewilderment and frustration as many are now struggling to make ends meet as they grapple with the sharp increase in living expenses.
For those earning the minimum wage of ₦30,000, purchasing cooking gas at these rates is becoming an unsustainable luxury.
The questions on everyone’s lips are: Why has there been such a significant increase in gas prices? Is the government aware of the hardships faced by its citizens? When will we start seeing positive developments from this administration?
Local authorities and leaders are urged to engage with the community, offering transparent information about the reasons behind this price surge and potential solutions.
It is imperative that concrete steps are taken to mitigate the impact of these rising prices, especially for those on minimum wage.
As the residents of Ogbaru and Anambra State at large grapple with these price hikes, the hope remains that their voices will be heard, and meaningful actions will be taken to alleviate their financial strain.
The onus lies on both the government and society to find a solution to this pressing issue before it further exacerbates the economic challenges faced by the people.
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