The Central Bank of Nigeria (CBN) has disclosed expectations that lifting petroleum from the recently launched Dangote Refinery would reduce the cost of food in Nigeria in the short to medium term.
CBN Governor, Olayemi Cardoso, who made the submission while speaking on Tuesday at a press conference after the 297th meeting of the Monetary Policy Committee (MPC) in Abuja, said the operations of the refinery would ease the cost of transportation and rub off on food prices.
He said the committee expects that the Dangote Refinery’s operation would also save the country in terms of foreign exchange demands, which would lead to improved external reserves.
“The committee expressed optimism that the lifting of refined petroleum products from Dangote Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term.
“This is also expected to moderate foreign exchange demands for importation of refined petroleum products with a positive spillover on external reserve and improvement in the overall balance of payment position,” Cardoso said.
The CBN Governor added that, “On food inflation, the upside risk remains flooding, hike in energy prices, scarcity of PMS, and most importantly, security in farming communities.
“Considering the weight of food in the CPI (consumer price index, which measures inflation) basket, (MPC) members recognise the efforts of the Federal Government in addressing insecurity in the farming community and stressed the need to remain steadfast.
“In addition, the MPC applauded the ongoing efforts of the Federal Government of Nigeria to bridge the supply deficit through duty-free import windows for food commodities.”