Nigerian inflation rises to 33.88% as food prices keep soaring in response to subsidy removal

ANY hopes of Nigeria's chronic inflationary crisis easing appear to have been dashed after a recent consumer product index report released by the National Bureau of Statistics (NBS) showed a 1.18% monthly increase with inflation now standing at 33.88%.

According to the NBS, for the month of October, inflation rose from 32.70% in September. On a year-on-year basis, the headline inflation rate was 6.55% points higher than the rate recorded in October 2023 which was 27.33%.

An NBS spokesman said: “On a month-on-month basis, the headline inflation rate in October 2024 was 2.64%, which was 0.12% higher than the rate recorded in September 2024 of 2.52%. This means that in October 2024, the rate of increase in the average price level was higher than the rate of increase in the average price level in September 2024.”

On a month-on-month basis, the food inflation rate in October 2024 was 2.94% which shows a 0.30% increase compared with the rate recorded in September 2024 of 2.64%. The rise can be attributed to the rate of increase in the average prices of palm oil, vegetable oil, mudfish, croaker, fresh fish, dried beef, goat meat, mutton, skin meat, bread, guinea corn flour, plantain flour, rice, etc.

According to the report, the average annual rate of food inflation for the 12 months ending October 2024 over the previous average was 38.12%, which was an 11.79% points increase from the average annual rate of change recorded in October 2023 of 26.33%. Ahead of the release of the data, some analysts projected that Nigeria’s inflation figure for October will hit 33.48% from 32.70% in September.

Nigeria’s inflation has experienced significant fluctuations throughout 2024. This persistent rise was primarily driven by steep increases in food and transportation costs following the removal of fuel subsidies and the continued naira depreciation, compounded by insecurity and flooding in the agricultural belt of the nation.

Earlier in the year, inflation hit 33.2% in March, following a February rate of 31.7%. June marked a peak at 34.19%, the highest in nearly 30 years, before easing slightly in subsequent months due to seasonal harvests.

However, inflation began climbing again in September. This uptick was driven primarily by higher energy costs, with petrol prices rising from N980 to around N1,050 per litre in Lagos and even higher in other states.

It is being projected that these adjustments could push the headline index above 35% by December. Food prices, in particular, have played a substantial role in the elevated headline rate, with September’s year-on-year food inflation rising to 37.77%, up by 25 basis points from August’s 37.52%.