MONETARY POLICY AND FOOD MARKET STABILITY: A COMPARATIVE REVIEW WITH CASE EVIDENCE FROM FOOD COMMODITY MARKETS IN ENUGU STATE, NIGERIA

Abstract

Following the global increase in food prices in 2024, the number of people unable to afford a healthy diet in Africa rose from 864 million to over 1 billion (64% to 66.6 %). Global shocks in food and energy markets have intensified food price inflation, deepening poverty and food insecurity in low-income countries. From 2019 to 2024, Nigeria experienced steep food price increases in basic starch staples, animal-source foods, vegetables, fruits, oils and fats, as shown on the Food CPI (FAO et al., 2025). Nigeria’s currency devaluation, aimed at attracting foreign capital, has triggered inflation and weakened purchasing power. Compared studies in Ghana and Kenya have observed a parallel trend in monetary policy and agriculture, noting that the currency volatility equates to spikes in food prices. This study examines how monetary policy reforms affect food-market stability, comparing data from food commodity markets in Enugu State, Nigeria. A multistage sampling procedure was used and 90 respondents were selected purposively. Primary data was collected using well-structured questionnaires. Data was analysed using descriptive statistics, such as frequency, mean, percentages, standard deviations and, Likert Scale Rating, inferential statistics, such as OLS multiple regression analysis were applied to assess monetary policy transmission effects. A significant improvement in digital financial inclusion occurred (64.85% to 73.94%), yet profitability collapsed as gross margins fell from 20.75 to 10.97%. The findings suggest that contractionary monetary measures, without complementary agricultural-finance and infrastructure policies, can amplify food-price instability.