Nigeria’s inflation rate climbed to 34.80% in December 2024, a marginal increase from 33.60% in November, according to the latest Consumer Price Index (CPI) report from the National Bureau of Statistics (NBS).
This marks yet another month of inflationary pressure, underscoring the persistent challenges facing the country’s economy. The NBS attributed the rise to increased demand for goods and services during the festive period, but experts argue that deeper structural issues are driving the unrelenting inflation.
On a year-on-year basis, the December 2024 inflation rate was 5.87 percentage points higher than the 28.92% recorded in December 2023, reflecting the severity of price increases over the past year. However, on a month-on-month basis, the headline inflation rate eased slightly to 2.44% in December from 2.64% in November, indicating a marginal slowdown in the rate of price increases within the month.
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Food Inflation Remains Alarmingly High
Food inflation, a critical component of Nigeria’s overall inflation, rose to 39.84% on a year-on-year basis in December 2024, up from 33.93% in December 2023. The NBS attributed the surge to significant price increases in staples such as yam, water yam, sweet potatoes, beer, maize grains, rice, and dried fish. These items form the backbone of many Nigerian diets, making the rising prices especially impactful on households.
On a month-on-month basis, however, food inflation declined to 2.66% in December from 2.98% in November. The slight drop was attributed to reduced prices in items like local beer (Burukutu), fruit juice, malt drinks, rice, maize flour, and water yam. Despite this monthly decline, the year-long trends reveal a broader crisis in the food sector.
The average annual food inflation rate for 2024 stood at 39.12%, an increase of 11.16 percentage points from the 27.96% recorded in 2023, further underscoring the worsening food affordability for most Nigerians.
Inflation’s Uneven Impact Across States
Inflationary pressures have not been evenly distributed across the country. States such as Sokoto (57.47%), Zamfara (46.39%), and Edo (46.32%) recorded the highest food inflation rates on a year-on-year basis in December 2024. In contrast, Ogun (34.24%), Rivers (35.43%), and Kwara (35.58%) experienced the slowest increases.
On a month-on-month basis, food inflation remained highest in Kogi (6.53%), Sokoto (6.21%), and Cross River (5.90%), while Yobe (-3.21%), Kano (-1.29%), and Abuja (-0.79%) saw declines.
Underlying Causes of Persistent Inflation
Despite repeated efforts by the government to control inflation, the consistent rise over recent months highlights the ineffectiveness of current policies. Analysts attribute the inflationary pressure largely to two key factors: the high cost of food and the devaluation of the naira. The devaluation, which has significantly weakened the local currency, has made imports more expensive, driving up costs across the board, particularly for food and essential goods.
Transportation costs, which have soared due to the removal of fuel subsidies earlier in the year, have further exacerbated the situation. With fuel prices remaining high, the cost of moving goods, especially agricultural produce, has surged, leading to sharp increases in food prices.
The persistent rise in inflation has led to growing calls for the government to adopt a more comprehensive approach to tackling Nigeria’s economic crisis. The suggestion to reopen borders and ease restrictions on food imports has been particularly prominent. Experts argue that these measures would help increase the supply of food, thereby reducing prices and alleviating some of the pressure on households.
Additionally, analysts have emphasized the need for improved transportation infrastructure and policies to reduce logistics costs, a major driver of food inflation. Subsidies or incentives for local food producers have also been touted to help stabilize prices in the long term.