Microeconomic Determinants of Rising Food Prices in Nigeria: An Analytical Perspective

This study examines the microeconomic determinants of rising food prices in Nigeria from an analytical perspective, focusing on inflation, exchange rate fluctuations, agricultural policies, and psychological behaviours. The study highlights the complex interplay between cost-push inflation, wage-price spirals, and currency depreciation, which contribute to rising food prices, particularly in import-dependent economies like Nigeria. The depreciation of the Nigerian naira increases the cost of imported food items, exacerbating inflationary pressures and leading to higher domestic food prices. Psychological factors, such as panic buying and hoarding, amplify price volatility, especially during uncertain or crises. Regional disparities in food pricing, driven by infrastructure deficits, insecurity, and inefficient supply chains, also contribute to food price instability. Government policies shape food price dynamics, including agricultural subsidies, price controls, and trade regulations. However, inconsistent policy implementation and coordination often lead to market distortions. The study recommends enhancing agricultural productivity, stabilizing the currency, improving infrastructure, managing market behaviour, and implementing effective price stabilization mechanisms to mitigate the impact of rising food prices on consumers. By addressing these issues, Nigeria can achieve more stable food prices and improved food security for its population.