The Nigerian Bureau of Statistics (NBS) has unveiled its Consumer Price Index (CPI) report for November 2023, revealing a drastic escalation in the headline inflation rate to 28.20%, marking a sharp uptick from October 2023’s 27.33%.
This soaring inflation rate hasn’t been witnessed in Nigeria since August 2005.
Analyzing the data, November 2023’s headline inflation surged by 0.87% points in contrast to October 2023. Moreover, on a year-on-year basis, the inflation rate saw an alarming spike of 6.73% points from November 2022’s 21.47%, signifying an unsettling annual leap in price levels.
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“Furthermore, on a month-on-month basis, the headline inflation rate in November 2023 was 2.09%, which was 0.35% higher than the rate recorded in October 2023 (1.73%),” the NBS said.
“This means that in November 2023, the rate of increase in the average price level is more than the rate of increase in average price level in October 2023.”
Food Inflation, the major driver
The report spotlighted the persistent driver behind this inflationary surge: the exorbitant cost of food items. Food inflation climbed to 32.84% year-on-year, escalating by 8.72% points from November 2022’s 24.13%. This surge is attributed to the soaring prices of essential food items such as Bread and cereals, Oil and fat, Potatoes, Yam and other Tubers, Fish, Fruit, Meat, Vegetables, Coffee, Tea, and Cocoa.
In assessing the month-on-month scenario, November 2023 witnessed a 2.09% inflation rate, surpassing October 2023’s 1.73%. This accelerated increment in the average price level indicates an aggravated inflationary trend from the preceding month.
“The rise in Food inflation on a month-on-month basis was caused by rise in the rate of increase in the average prices of Bread and Cereals, Oil and fat, Meat, Coffee, Tea and Cocoa, Pota-toes, Yam & Other Tubers,” the report stated.
State-by-state inflation
The regional disparity in inflation rates further amplifies the concerns. Kogi (33.28%), Lagos (32.30%), and Rivers (32.25%) recorded the highest year-on-year inflation rates, while Borno (22.47%), Katsina (24.91%), and Plateau (25.53%) exhibited the slowest increases. Moreover, Kano (3.55%), Kebbi (3.34%), and Borno (3.24%) witnessed the highest month-on-month rises, whereas Taraba (0.74%), Anambra (1.00%), and Enugu (1.18%) faced the least upticks.
Delving into food inflation disparities, Kogi (41.29%), Kwara (40.72%), and Rivers (40.22%) experienced the highest year-on-year surges, while Bauchi (26.14%), Borno (27.34%), and Jigawa (27.63%) witnessed the slowest rises. Cross River (4.37%), Edo (3.95%), and Rivers (3.91%) topped the month-on-month food inflation, with Anambra (0.63%), Oyo (0.91%), and Bauchi (1.00%) showing the most moderate increases.
The latest inflation report confirms the fears expressed by experts that the soaring cost of living, especially food items, if not mitigated, will shoot inflation above 30% in the first quarter of 2024.
“Specifically, our model suggests that the combined influence of fuel subsidy removal and foreign exchange liberalization may drive headline inflation to about 30 percent by December 2023,” KPMG said in its macroeconomic review for the first and second half of 2023.
Though the latest inflation rate slightly falls short of the KPMG’s projected 30%, it underscores the slowness of the government’s reforms in revitalizing the economy.
The central bank said Thursday it expects exchange rate and inflationary pressures may to decline in 2024.