The latest data released by the Nigerian Bureau of Statistics (NBS) paints a concerning picture of inflationary pressures across the country, with Nigeria’s headline inflation rate surging to 29.90% in January 2024.
This marks a notable increase of 0.98% points compared to December 2023, reflecting the ongoing economic challenges faced by the nation.
“In January 2024, the headline inflation rate increased to 29.90% relative to the December 2023 rate,” stated the NBS report. “This upward trend indicates a 0.98% points increase compared to the preceding month.”
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Furthermore, the data shows a substantial year-on-year increase, with January 2024’s headline inflation rate being 8.08% points higher than that of January 2023, which stood at 21.82%.
The rise in headline inflation is mirrored in other economic indices, notably in food inflation. Food inflation in January 2024 surged to 35.41% year-on-year, a notable increase from the 24.32% recorded in January 2023. On a month-on-month basis, food inflation rose by 3.21%, indicating a 0.49% increase compared to December 2023.
The NBS attributed the rise to many factors, mainly, the rise in the cost of food items.
“This surge in food inflation can be attributed to significant increases in the prices of essential commodities such as bread, cereals, potatoes, yam, oil, fat, fish, meat, fruit, coffee, tea, and cocoa,” noted the NBS report.
Core inflation, which excludes volatile agricultural produce and energy prices, also experienced a sharp increase. “In January 2024, core inflation stood at 23.59% year-on-year, up from 18.88% in January 2023. This represents a notable rise of 4.71% points,” the report said.
The NBS attributed the increase in core inflation can be attributed to rising prices in sectors such as passenger transport, medical services, housing rentals, pharmaceuticals, accommodation services, and passenger transport by air.
State-by-state inflation
Further analysis of the data reveals significant disparities in inflation rates among different states. On a year-on-year basis, Kogi, Oyo, and Akwa Ibom recorded the highest headline inflation rates, standing at 35.79%, 34.58%, and 33.16% respectively. Conversely, Borno, Taraba, and Benue recorded the slowest rise in headline inflation, with rates of 22.57%, 24.83%, and 26.64% respectively.
Food inflation, a critical component of overall inflation, also exhibited considerable variations across states. Kogi, Kwara, and Rivers experienced the highest food inflation rates on a year-on-year basis, reaching 44.18%, 40.87%, and 40.08% respectively. Meanwhile, Bauchi, Adamawa, and Kano recorded the slowest rise in food inflation, with rates of 28.83%, 29.80%, and 30.08% respectively.
Delving deeper into month-on-month fluctuations, Ondo, Osun, and Jigawa recorded the highest increases in headline inflation for January 2024, with rates of 3.79%, 3.77%, and 3.58% respectively. Conversely, Bayelsa, Yobe, and Ogun witnessed the slowest rise in headline inflation on a month-on-month basis, with rates of 0.45%, 1.10%, and 1.35% respectively.
The ramifications of soaring inflation rates extend beyond statistical figures, impacting the daily lives and well-being of Nigerians. High inflation erodes purchasing power, making essential goods and services less affordable for the average citizen. This situation is particularly acute in a country where a significant portion of income is spent on necessities such as food and transportation.
Economists said the persistent rise in inflation rates poses a serious threat to the economic well-being of Nigerians, and it reduces the real income of households, exacerbates poverty levels, and undermines overall economic stability.
Moreover, the inflationary pressures exacerbate existing challenges, such as the foreign exchange crisis. The depreciation of the local currency against foreign currencies contributes to the inflationary spiral by increasing the cost of imported goods and raw materials, further fueling price hikes. The naira traded at N1,590/$1 at the parallel market and N1,498.25 at the official window (NAFEM).
Against the backdrop of Nigeria’s escalating inflation rates, as evidenced by the surge in headline, food, and core inflation, experts have advocated the urgent need for comprehensive economic reforms. They note that tackling inflationary pressures is a key way to safeguarding the economic well-being of Nigerians and fostering sustainable development in the country.