Nigeria, Africa’s largest economy, is struggling with a staggering rise in inflation as its currency, the naira, continues to weaken against major currencies. According to the latest report from the National Bureau of Statistics (NBS), the country’s annual inflation rate surged to 29.90 percent in January 2024, marking the thirteenth consecutive monthly increase and reaching a record high.
Food inflation, which constitutes half of the overall inflation rate, soared to 35.41 percent in January, up from 33.93 percent in December. The increase in food prices was fueled by the upsurge in the prices of essential items such as potatoes, yam, cereals, fish, meat, and vegetables.
According to the National Bureau of Statistics (NBS), “In January 2024, the headline inflation rate increased to 29.90% relative to the December 2023 headline inflation rate which was 28.92%. Looking at the movement, the January 2024 headline inflation rate showed an increase of 0.98% points when compared to the December 2023 headline inflation rate. Similarly, on a year-on-year basis, the headline inflation rate was 8.08% points higher compared to the rate recorded in January 2023, which was 21.82%.
“This shows that the headline inflation rate (year-on-year basis) increased in January 2024 when compared to the same month in the preceding year (i.e., January 2023). Furthermore, on a month-on-month basis, the headline inflation rate in January 2024 was 2.64%, which was 0.35% higher than the rate recorded in December 2023 (2.29%). This means that in January 2024, the rate of increase in the average price level is more than the rate of increase in the average price level in December 2023”.
The impact of inflation extends across various sectors of the economy, with food and non-alcoholic beverages contributing the most to the overall increase in the Consumer Price Index. Additionally, core inflation, which excludes volatile food and energy prices, rose to 23.59 percent in January 2024, up from 18.88 percent a year earlier.
The effects of skyrocketing inflation are being felt both in urban and rural areas, with urban inflation reaching 31.95 percent and rural inflation hitting 28.10 percent on a year-on-year basis. This sharp increase in prices has prompted concerns about the rising cost of living and has sparked protests in several states across the country.
In response to the economic challenges, President Bola Tinubu has ordered the release of grains to address food costs, while stakeholders are engaging in discussions to mitigate the impacts of fuel subsidy removal and insecurity in certain regions.
Despite the economic outlook, the Central Bank of Nigeria (CBN) remains hopeful that inflationary pressures will ease in 2024, citing the bank’s inflation-targeting policy and anticipated improvements in agricultural productivity.
