In May 2024, Nigeria’s headline inflation rate rose to 33.95%, up from 33.69% in April 2024, according to the latest Consumer Price Index (CPI) published by the Nigerian Bureau of Statistics (NBS).
This increase of 0.26 percentage points highlights the persistent inflationary pressures in the country, marking its highest rate in 28 years.
Year-on-year, the headline inflation rate increased by 11.54 percentage points, from 22.41% in May 2023 to 33.95% in May 2024. Despite this annual rise, the month-on-month inflation rate showed a slight decrease, falling to 2.14% in May 2024 from 2.29% in April 2024. This indicates a slower rate of increase in the average price level for May compared to April.
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The twelve-month average CPI ending May 2024 saw a significant rise of 29.06%, a 7.86 percentage point increase from the 21.20% recorded in May 2023. This data reflects the broader inflationary trends affecting the Nigerian economy over the past year.
“The percentage change in the average CPI for the twelve months ending May 2024 over the average of the CPI for the previous twelve-month period was 29.06%, showing a 7.86% increase compared to 21.20% recorded in May 2023,” the NBS said.
Urban inflation in May 2024 was notably higher, reaching 36.34% year-on-year, up from 23.74% in May 2023. On a month-on-month basis, urban inflation fell slightly to 2.35% from 2.67% in April 2024. The twelve-month average for urban inflation was 31.07%, up from 21.95% in the previous year.
Rural inflation also increased, hitting 31.82% year-on-year in May 2024, compared to 21.19% in May 2023. Month-on-month, rural inflation saw a marginal rise to 1.94% from 1.92% in April 2024. The twelve-month average for rural inflation was 27.27%, higher than the 20.50% recorded in May 2023.
“The corresponding twelve-month average for the Urban inflation rate was 31.07% in May 2024. This was 9.12% points higher compared to the 21.95% reported in May 2023,” the NBS data said.
Food inflation soared to 40.66% year-on-year in May 2024, significantly higher than the 24.82% recorded in May 2023. The increase was driven by rising prices in key food items such as semovita, oatflakes, yam flour, garri, beans, Irish potatoes, yams, palm oil, vegetable oil, stockfish, mudfish, crayfish, beef, chicken, pork, and bush meat. However, on a month-on-month basis, food inflation decreased to 2.28% from 2.50% in April 2024. The twelve-month average for food inflation was 34.06%, up from 23.65% in May 2023.
The NBS noted that “The average annual rate of Food inflation for the twelve months ending May 2024 over the previous twelve-month average was 34.06%, which was 10.41% points increase from the average annual rate of change recorded in May 2023 (23.65%).”
Core inflation, excluding volatile agricultural products and energy, stood at 27.04% year-on-year in May 2024, up from 19.83% in May 2023. This was driven by increases in the prices of rent, intercity bus journeys, taxi rides, accommodation services, and medical services. Month-on-month, core inflation also fell to 2.01% from 2.20% in April 2024. The twelve-month average core inflation rate was 23.45%, higher than the 18.11% recorded in May 2023.
The CPI report also highlights regional variations in inflation rates. Bauchi recorded the highest year-on-year inflation rate at 42.30%, followed by Kogi at 39.38% and Oyo at 37.73%. Conversely, Borno, Benue, and Delta had the slowest year-on-year inflation rises at 25.97%, 27.74%, and 28.67%, respectively. Month-on-month, Kano saw the highest increase at 4.24%, while Ondo, Kwara, and Yobe recorded the slowest rises at 0.57%, 1.19%, and 1.24%, respectively.
Food inflation was highest in Kogi at 46.32%, followed by Ekiti at 44.94% and Kwara at 44.66%. The slowest rises were in Adamawa, Bauchi, and Borno at 31.72%, 34.35%, and 34.74%, respectively. On a month-on-month basis, Gombe, Kano, and Bayelsa saw the highest increases in food inflation, while Ondo, Yobe, and Adamawa recorded the slowest rises.
Why Efforts to Curb the Tide Are Not Yielding Results
Nigeria’s inflation rate continues to rise despite various efforts by the government to stabilize the economy. This persistent rise in inflation is a significant cause of concern for both policymakers and the general populace, as it compounds the economic hardship faced by many Nigerians.
The Nigerian government, through the Central Bank of Nigeria (CBN), has implemented several measures to curb inflation. One of the key strategies has been the continuous raising of interest rates. The CBN has repeatedly increased the Monetary Policy Rate (MPR) to reduce money supply and curb inflationary pressures. Higher interest rates are intended to make borrowing more expensive, thereby reducing consumer spending and slowing down inflation.
However, despite these efforts, inflation has continued to rise.
In recent advisories, the World Bank has warned that simply raising interest rates and other monetary tightening measures are insufficient to curb inflation in Nigeria. The global financial institution has pointed out that Nigeria’s inflation is driven by structural issues that cannot be addressed by monetary policy alone. The World Bank has advised the Nigerian government to focus on the underlying factors contributing to inflation.
One of the main drivers of inflation in Nigeria is insecurity, particularly in the northern regions of the country. Insecurity has severely inhibited farming activities, leading to disruptions in food supply and consequent increases in food prices. The rise in food inflation, which stood at 40.66% year-on-year in May 2024, is a clear indication of how critical the agricultural sector is to the overall inflation picture.
The frequent attacks by insurgent groups and bandits have made it difficult for farmers to cultivate and harvest crops, reducing food production and driving up prices.
To effectively tackle inflation, the Nigerian government has been advised to address these core issues. Experts said that improving security in farming regions is paramount to boosting agricultural productivity and stabilizing food prices. In addition to security, the government has been reminded of the need for investment in agricultural infrastructure, support for farmers, and policies that enhance food supply chains.
The government has also been urged to enhance economic diversification and reduce dependency on oil revenues. Economists advised that by developing other sectors such as manufacturing and services, the economy can become more resilient and less vulnerable to external shocks.
Diversification efforts would not only create jobs but also help stabilize the economy, thereby reducing inflationary pressures, they said.
They further said that fiscal policies need to be aligned with these structural reforms, emphasizing that government spending should prioritize critical infrastructure, healthcare, education, and economic projects that can stimulate sustainable growth and development.