According to a report released by the National Bureau of Statistics (NBS), Nigeria’s inflation rate surged to 33.95% in May 2024, up from 33.69% in April 2024.
This increase reflects a steady rise in the cost of living, with year-on-year inflation rates rising by 11.54% points from 22.41% in May 2023.
Part of the report reads,
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“In May 2024, the headline inflation rate increased to 33.95% relative to the April 2024 headline inflation rate which was 33.69%. Looking at the movement, the May 2024 headline inflation rate showed an increase of 0.26% points when compared to the April 2024 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 11.54% points higher compared to the rate recorded in May 2023, which was 22.41%. This shows that the headline inflation rate (year-on-year basis) increased in the month of May 2024 when compared to the same month in the preceding year (i.e., May 2023).
“On the contrary, on a month-on-month basis, the headline inflation, rate in May 2024 was 2.14%, which was 0.15% lower than the rate recorded in April 2024 (2.29%). This means that in the month of May 2024, the rate of increase in the average price level is less than the rate of increase in the average price level in April 2024.”
In response to the alarming surge in the inflation rate, several analysts across the country, have called on the government to boost Foreign Exchange (FX) supply and address the rising cost of petroleum products as well as improve fiscal discipline. They argue that with the current lending rate by banks at 35 percent due to the high Monetary Policy Rate (MPR), consumers are at the receiving end.
Also speaking on the surging inflation rate, Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, said none of the drivers of inflation had been abated, adding that the continuous increase of MPR was beginning to impact the inflation rate negatively as every business depends on bank credit to survive.
“If the interest rate rises as high as 35 percent currently due to very high MPR, the ultimate victims will be consumers through high prices of goods and services. Multinational companies are closing down their operations in Nigeria, their product offerings Will become expensive in the marketplace. FX scarcity continues to be a bane in the fight to control Inflation,” he added.
As Nigeria grapples with soaring inflation, the call for increased FX liquidity and comprehensive economic reforms becomes ever more pressing. Addressing these challenges head-on is crucial for safeguarding the financial well-being of Nigerians and steering the nation towards a more stable and prosperous future.