ASSESSING THE SYMMETRIC INTERPLAY BETWEEN INSECURITY, CLIMATE CHANGE, AND FOOD INFLATION IN NIGERIA

Abstract

Food inflation is one of the most regressive taxation dynamics globally; it affects the average person and is more detrimental to low-income consumers than to those in higher income brackets. The interrelated problems of insecurity and climate change, both of which have serious effects on food systems and economies worldwide, have become increasingly apparent to the world community in recent years. The study's goal is to determine whether climate change and insecurity contribute to higher food inflation in Nigeria. With time series data spanning 2011M1-2022M12, we use the ARDL approach to cointegration analysis. The findings provide very convincing evidence of a relationship between rising food prices, insecurity, and climate change. We discovered that climate change and the degree of insecurity play a significant role in explaining why food prices have increased in Nigeria. According to an estimate of the coefficient of error correction term (ECT), the rate of adjustment of food price inflation from the initial shock would be corrected by about 23 percent each month. The study also shows that there is a clear connection between climate change, insecurity, and food price inflation in Nigeria and that the independent parameters are important trigger variables for the food price inflation in Nigeria in the period under study. Therefore, this study suggests policy interventions inform of financial safety net to help households negatively impacted by insecurity. To address future needs and climate-related challenges, the Nigerian state should transition from a traditional agricultural system to climate-smart agriculture.