Nigeria’s inflation rate recorded a slight decline in August 2024, dropping to 32.15% from 33.40% in July 2024, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS).
This indicates a 1.25 percentage point decline from July’s rate, signaling some relief for the country’s economy.
However, the year-on-year (YoY) headline inflation rate for August 2024 was 6.35 percentage points higher than the 25.80% recorded in August 2023. This demonstrates that while inflation is easing month-on-month, it remains significantly higher compared to the same period in the previous year.
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The report notes that inflationary pressures persist, especially given that price increases have been a consistent trend since early 2024.
“On a month-on-month (MoM) basis, inflation in August 2024 stood at 2.22%, a slight decline of 0.06 percentage points from the 2.28% recorded in July 2024,” the report said, underscoring a reduction in the pace of price increases in August compared to July.
The average CPI for the twelve-month period ending August 2024 was 31.26%, marking an 8.88 percentage point increase from the 22.38% recorded for the same period ending in August 2023. This data underlines the long-term upward trajectory of inflation over the past year.
Urban and Rural Inflation
The NBS also provided data on inflation in urban and rural areas. In urban areas, the inflation rate in August 2024 was 34.58% YoY, reflecting a 6.89 percentage point increase from the 27.69% recorded in August 2023. On a MoM basis, urban inflation was 2.39%, a slight decline from 2.46% in July 2024.
“The twelve-month average urban inflation rate for August 2024 was 33.44%, a 9.98 percentage point increase compared to August 2023,” the report said.
For rural areas, inflation was recorded at 29.95% YoY in August 2024, which was 5.85 percentage points higher than the 24.10% in August 2023. The rural MoM inflation rate in August 2024 was 2.06%, down slightly from 2.10% in July 2024.
“The average annual rural inflation rate for the twelve-month period ending in August 2024 was 29.32%, representing a 7.93 percentage point increase from the previous year,” the NBS said.
Food Inflation
Food inflation in August 2024 stood at 37.52% YoY, a sharp 8.18 percentage point increase from 29.34% in August 2023. The rise in food prices was driven primarily by increases in the cost of bread, maize grains, yam, cassava, palm oil, and certain beverages like Ovaltine and Lipton.
On a MoM basis, food inflation for August 2024 was 2.37%, a marginal decline from 2.47% in July 2024. The report attributes this slight decline to a reduction in the price increases for items such as tobacco, tea, coffee, groundnut oil, yam, and potatoes.
The twelve-month average food inflation rate for the period ending in August 2024 was 36.99%, which was 11.98 percentage points higher than the 25.01% recorded for the same period in 2023. This indicates that food inflation has been a major driver of the overall inflation rate, worsening the economic challenges faced by households across the country.
Core Inflation
Core inflation, which excludes volatile items like agricultural produce and energy, was recorded at 27.58% YoY in August 2024, up by 6.43 percentage points from 21.15% in August 2023. The highest price increases were observed in categories such as rents, bus and motorcycle transport, and medical services.
“On a MoM basis, core inflation stood at 2.27% in August 2024, a slight rise from 2.16% in July. The twelve-month average core inflation rate for August 2024 was 25.18%, 6 percentage points higher than the 19.18% recorded in August 2023,” the report said.
Regional Inflation Differences
Regionally, Bauchi State recorded the highest YoY all-items inflation rate at 46.46%, followed by Kebbi (37.51%) and Jigawa (37.43%). Benue (25.13%), Delta (26.86%), and Imo (28.05%) had the slowest YoY inflation rates. MoM, Kwara recorded the highest increase at 4.45%, followed by Bauchi (4.22%) and Adamawa (3.99%). Conversely, Ogun (0.21%), Abuja (0.92%), and Kogi (1.14%) saw the slowest MoM rise in inflation.
For food inflation, Sokoto recorded the highest YoY increase at 46.98%, followed by Gombe (43.25%) and Yobe (43.21%). Benue (32.33%), Rivers (33.01%), and Bayelsa (33.36%) had the slowest YoY food inflation rates. MoM, Adamawa had the highest increase in food inflation at 5.46%, with Kebbi (4.48%) and Borno (3.88%) following closely. Ogun (0.08%), Akwa Ibom (0.45%), and Sokoto (1.00%) recorded the slowest MoM rise in food inflation.
Given the month-on-month decline, economists have called on the Central Bank of Nigeria (CBN) to reassess its monetary policy stance, reducing the Monetary Policy Rate (MPR). Many argue that lowering the MPR, which currently stands at 18.75%, could help ease borrowing costs and stimulate economic activity.
However, Nigerians say that the technical reduction in the inflation rate has not resulted in the reduction of the costs of goods and services. Nigerians continue to face unaffordable prices for everyday goods and services, especially food – leading many to question the practical impact of these figures.