Recent increases in crude oil production and export prices have supported oil revenues. This recovery in oil export revenues and resulting increase in foreign exchange reserves, coupled with relatively stable inflation are helping to gradually drive Nigeria’s economy out of recession (Figures 1 and 2).
The gap between the official inter-bank and the parallel Bureau de Change exchange rates continues to narrow, contributing to relatively stable prices on the national level. Ongoing harvests have also impacted general food prices (Figures 3 and 4).
In general, main staple prices are lower across most markets relative to recent months and the last year. However, prices remain higher than average across most markets and for most commodities. Observed staple food prices are higher in the northeast relative to other areas of the country (Figures 5, 6 and 7).
Prices of millet and sorghum, the major staples traded along the Nigeria-Niger border markets, are relatively less expensive in Kano-Dawanau market, the major regional collection point for traders from Niger. Thus, with a stable Naira (NGN) and in the absence of any increased restrictions on grain exports, traders from Nigeria will likely export their commodities to Niger in the coming months (Figures 8 and 9).
As the harvests continue, market supply and households’ food stocks will continue to increase. Prices will decline further for most staple food items, but will remain above the five-year average. Staple food prices will remain relatively high across northeast Nigeria throughout the consumption year due to below-average local harvests, movement restrictions along key marketing corridors, high transaction costs, and below-normal market functioning in certain areas (Figure 10).
Traders’ reported capacity to respond to increased demand varies by market. Most traders in the northeast report only having the capacity to absorb a 25 percent increase in demand. Any scale-up of humanitarian cash-based transfer (CBT) interventions should be partial and gradual (Figure 11)