Economist Identifies Causes of Inflation in Nigeria, Proffers Solution

Dumebi Oluwole, a leading voice in Nigeria’s economic landscape, has noted that the root causes of inflation in Nigeria remained complex and multifaceted, and require a comprehensive approach to address. Oluwole, currently the Team Lead of the Country Risk Team at Stears, called on Nigeria’s policymakers in a recent interview to take a holistic approach to addressing inflation.“This includes investing in improving agricultural productivity by solving long-term structural issues like insecurity and poor storage facilities to address food quality, affordability and access challenges”. By doing so, we can enhance food security and promote economic diversification, gradually reducing the country’s reliance on imports, vulnerability to external factors, and promoting sustainable economic growth,” she said.
Oluwole further stated that Nigeria’s inflation is much more structural, requiring strong fiscal efforts to curtail price pressures that stem primarily from food, which accounts for over 30% of items in the inflation basket.

The economist, whose expertise in macroeconomic, industry and consumer analysis has earned her recognition in professional forums, said that a proactive approach to addressing the inflation problem is by aggressively tackling insecurity in all its forms, as that has become the foremost concern aggravating food inflation, thus overall price pressures. The nation needs to focus on securing farms and farmers to improve the food supply, as monetary policy measures will solely support signalling and boosting investor confidence—a path the Central Bank of Nigeria has embarked on since mid-2023, she said. Oluwole further emphasised the need for subnationals to harness more agricultural resources and improve value addition. She notes that over 40% of Nigerian states have peculiar food items they can produce and scale to enhance nationwide food supply, effectively supporting output in the north and middle-belt region. Beyond spreading food security risks, it increases food self-sufficiency and job creation, attracts long-term capital, and fosters industrialisation efforts, Oluwole noted. Commending the federal government for the recent purchase of 2,000 tractors and other agricultural equipment, Oluwole advised the government to take it further by working with stakeholders, including relevant MDAs, regulators and private sector players to develop policies that promote economic growth, stability, and prosperity for all Nigerians. She advocates strategically supporting SMEs, which account for over 30% of the nation’s GDP and employ over 80% of the population. Targeted investments down the agricultural and food supply chain, like cold storage, food production, R&D food technology and logistics, will be strong and effective developments.

She further advocates for the inherent use of data amongst stakeholders to provide the additional nuance and context to make data-driven investment, policy and business decisions in tackling the food security problem. Data will show us the what and where, pointing us to the best approach for solving the multifaceted inflation and structural growth issues. “Data analysis is critical to understanding the Nigerian economy. By analysing data, we can identify trends, patterns, and correlations that can inform policy decisions and drive economic growth,” she emphasised.

Oluwole’s work at Stears has been instrumental in shaping policy debates and national strategy, with her insights drawing widespread attention in the press, from local business news to international outlets.