The inflationary pressure on Nigeria’s economy has further intensified, with the headline inflation rate climbing to 33.88% in October 2024, according to the latest report from the Nigerian Bureau of Statistics (NBS).
This marks an increase from the September 2024 figure of 32.70%, indicating a month-on-month rise of 1.18 percentage points.
Year-on-year, the October 2024 headline inflation rate was 6.55 percentage points higher than the 27.33% recorded in October 2023. The NBS report highlights that the inflation rate’s continued rise on a yearly basis underscores a deteriorating economic situation. On a month-on-month basis, the headline inflation rate in October 2024 stood at 2.64%, a slight increase from 2.52% in September 2024, signaling an accelerated rate of price increases over the past month.
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The report also noted that the percentage change in the average Consumer Price Index (CPI) for the twelve months ending October 2024 was 32.26%, reflecting an 8.82% rise compared to 23.44% in October 2023. This highlights the persistent and worsening inflationary pressures affecting Nigeria’s economy over the last year.
Urban and Rural Inflation Rates
The urban inflation rate on a year-on-year basis surged to 36.38% in October 2024, a rise of 7.09 percentage points compared to 29.29% in October 2023. Month-on-month, urban inflation stood at 2.75%, marginally higher than September 2024’s rate of 2.67%. The twelve-month average for urban inflation was recorded at 34.52%, an increase of 9.76 percentage points from 24.76% in October 2023.
In rural areas, the inflation rate also worsened significantly. The rural inflation rate for October 2024 was 31.59% year-on-year, up by 6.01 percentage points compared to 25.58% in October 2023. On a month-on-month basis, rural inflation was 2.53%, slightly higher than September 2024’s rate of 2.39%. The twelve-month average for rural inflation was 30.24%, representing an 8.01 percentage point increase from 22.23% recorded in October 2023.
Food Inflation
Food inflation, a key driver of overall inflation, reached a staggering 39.16% year-on-year in October 2024, a 7.64 percentage point increase from the 31.52% recorded in October 2023. The rise in food inflation was attributed to increases in the prices of essential items such as rice, maize, guinea corn, yam, water yam, and palm oil. On a month-on-month basis, food inflation stood at 2.94%, up by 0.30 percentage points from September 2024’s figure of 2.64%.
This rise was driven by surging prices in the oil and fats class (including palm and vegetable oils), fish class (such as mudfish and croaker), meat class (including goat meat and beef), and the bread and cereals class.
The average annual food inflation rate for the twelve months ending October 2024 was 38.12%, a sharp increase of 11.79 percentage points compared to the 26.33% recorded in October 2023.
Core Inflation
The core inflation rate, which excludes volatile agricultural and energy products, stood at 28.37% in October 2024, reflecting a year-on-year increase of 5.79 percentage points compared to 22.58% in October 2023. Month-on-month, core inflation was recorded at 2.14%, slightly higher than the 2.10% seen in September 2024. Key contributors to the rise included transport costs, housing rentals, meals at local restaurants, and personal grooming services.
The average annual core inflation rate for the twelve months ending October 2024 was 26.12%, up by 6.14 percentage points from 19.98% in October 2023.
Inflation Across States
Inflationary pressures varied across states, with Bauchi (46.68%), Kebbi (40.02%), and Sokoto (39.65%) recording the highest year-on-year inflation rates in October 2024. Conversely, Delta (27.85%), Benue (28.22%), and Katsina (29.59%) recorded the lowest. On a month-on-month basis, Kano (3.77%), Bauchi (3.74%), and Adamawa (3.59%) saw the highest inflation increases, while Kwara (1.27%), Ondo (1.49%), and Lagos (1.91%) experienced the slowest rises.
Food inflation was notably highest in Sokoto (52.18%), Edo (46.55%), and Borno (45.85%) year-on-year, while Kwara (31.68%), Kogi (33.30%), and Rivers (33.87%) recorded the lowest rates. On a month-on-month basis, Adamawa (5.08%), Sokoto (4.86%), and Yobe (4.34%) led the food inflation surge, whereas Kwara (1.11%), Ondo (1.31%), and Kogi (1.50%) had the least increases.
The Economic Impact
The continued rise in inflation underscores the growing concerns over the effectiveness of the government’s economic policies. Analysts believe this trend indicates that measures taken so far to stabilize the economy and curb inflation are failing to yield tangible results.
This inflationary pressure is compounded by the naira’s recent depreciation, despite reports from the Central Bank of Nigeria (CBN) that the country’s foreign reserves have climbed to $40 billion. Critics argue that this supposed financial cushion has not translated into macroeconomic stability or relief for citizens struggling with skyrocketing prices.
The relentless inflation surge, particularly in food prices, poses a significant threat to household consumption and overall economic growth. With basic commodities becoming increasingly unaffordable, Nigerians are grappling with diminishing purchasing power, further worsening the country’s economic woes.