Finance Minister: How Boosting Food Production is the Key to Lower Inflation and Stable Exchange Rate
Finance Minister Wale Edun emphasized the critical role of increased food production in driving economic growth, stating that affordable food is essential for reducing inflation and stabilizing the exchange rate.
During a recent workshop in Abuja focused on the Special Agro-Industrial Processing Zones (SAPZ), Edun explained that food comprises a significant portion of the Consumer Price Index, currently accounting for 50%. He noted that successful initiatives in food production could help lower the current inflation rate, which exceeds 30%, and create favorable conditions for borrowing and investment in the private sector.
“The success of our food production efforts will lead to lower inflation, reduced interest rates, and a stronger exchange rate, enabling further investment opportunities,” Edun stated.
The workshop was organized by the Federal Ministry of Agriculture and Food Security in partnership with several Development Financing Institutions, including the African Development Bank (AfDB) and the International Fund for Agricultural Development (IFAD).
Edun expressed optimism about the SAPZ program’s potential to drive Nigeria’s agro-industrial growth and modernize the economy. He linked the initiative to President Bola Ahmed Tinubu’s macroeconomic stabilization efforts, which aim to reduce inflation and enhance foreign reserves.
He elaborated that while the immediate goal is to provide affordable food for Nigerians, the long-term vision includes boosting exports and improving the trade balance. He assured that with a focus on successful food production, the program would meet its objectives, ultimately benefiting the economy and citizens.
Agriculture and Food Security Minister Abubakar Kyari highlighted the transformative potential of the SAPZ, designed to increase food production, create jobs, and stimulate economic growth. The program aims to implement a design, build, and operate model that could generate 500,000 direct and indirect jobs and improve food security by significantly increasing staple crop yields while reducing post-harvest losses.
Kyari underscored that the SAPZ is a cornerstone of President Tinubu’s agenda for achieving food security and inclusive economic growth, emphasizing that the decisions made today will shape the initiative’s success.
Dr. Abdul Kamara, Director General of the AfDB Nigeria Country Department, called for enhanced efforts to implement the SAPZ, highlighting its potential to strengthen Nigeria’s rural economy and advance industrialization. He noted that the first phase of the program, launched in December 2021, covers seven states and aims to support approximately 1.5 million households.
Dr. Kamara also referenced Ethiopia’s successful agricultural transformation through similar programs, expressing confidence that Nigeria can achieve self-sufficiency in key crops.
Dede Ekoue, Country Director of IFAD, reaffirmed the organization’s commitment to supporting SAPZ and highlighted collaborations with state governments, particularly in Kano, to enhance agricultural productivity and market connections for farmers.
Lastly, Prof. Banji Oyelaran-Oyeyinka, Senior Special Adviser to the President on Industrialization, pointed out the need for Nigeria to advance its agricultural yield and industrial capabilities, stating that with the right strategies, the country could significantly enhance its GD
P over the next decade.
