Investigating the Determinants of Food Price Inflation in Nigeria

Abstract

The main purpose of this paper is to investigate the determinants of food price inflation in approach. The paper used quarterly time series data for the selected macro-economic variables: food 2014. The results indicate significant and long run relationship between food price inflation and its determinants. The findings show that gross domestic product and energy price contributes to food prices inflation, while money supply and exchange rate reduces food prices inflation in the long run. In the short run, the results show that all the determinants were insignificant in explaining food price inflation which suggests that food price inflation is a long run phenomenon in Nigeria. It is recommended that the government should provide measures that will reduce the prices on energy inputs and encourage private sector credits towards agricultural activities in order to lower the cost of production and higher prices on food items in the country.