Nigeria’s Inflation Hits 29.90% In January

Nigeria’s annual inflation rate rose to 29.90 per cent in January from 28.92 per cent in December 2023, the National Bureau of Statistics (NBS) said Thursday.

The statistics office said the January 2024 headline inflation rate showed an increase of 0.98 per cent points when compared to the December 2023 headline inflation rate.

The NBS said on a year-on-year basis, the headline inflation rate was 8.08 per cent points higher compared to the rate recorded in January 2023, which was 21.82 per cent.

“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),” it said.

Furthermore, the bureau said on a month-on-month basis, the headline inflation rate in January 2024 was 2.64 per cent, which was 0.35 higher than the rate recorded in December 2023 (2.29 per cent).

This, it said, 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.

According to the report, the food inflation rate in January 2024 quickened to 35.41 per cent on a year-on-year basis, which was 11.10 per cent points higher compared to the rate recorded in January 2023 (24.32 per cent).

In recent years, food prices have been on the rise across Nigeria. The situation became more complex after President Bola Tinubu announced the end of fuel subsidy payments during his inauguration as president on 29 May 2023.

The upward trend in the prices of these staples as well as other products has weakened the purchasing power of many citizens, making it difficult for many households in the country to afford daily meals.

Forex scarcity, orchestrated by exponential demand for dollars by Nigerians willing to offset bills (school fees and medical bills) abroad, as well as unremitted forex backlogs by the Central Bank of Nigeria, have further mounted pressure on the naira.

This newspaper reported that Naira plunged to a record low on Monday after exchanging at N1,534.39 to a dollar at the official market segment.

According to data published on the FMDQ website, the local currency moved to an intraday high of N1000/$1 and a low of N1,550 to a dollar before it eventually settled at N1,534.39 at the close of business on Monday.

The rate implies a 4.38 per cent depreciation from the previous market sales on Friday last week.

On Monday, forex turnover at the authorised market stood at $89.61 million amidst increased demand and inflationary pressure across sectors of the country’s economy.

Report

In its inflation report Thursday, the NBS said the contributions of items on the divisional year-on-year level to the increase in the headline index are food & non-alcoholic beverages (15.49 per cent), housing water, electricity, gas & other fuel (5.00 per cent), clothing & footwear (22.29 per cent), and transport (1.95 per cent),.

Others are furnishings & household equipment & maintenance (1.50 per cent), education (1.18 per cent), health (0.90 per cent), miscellaneous goods & services (0.50 per cent), restaurant & hotels (0.36 per cent), alcoholic beverage, tobacco & kola (0.33 per cent), recreation & culture (0.21 per cent) and communication (0.20 per cent).

The percentage change in the average CPI for the twelve-month ending January 2024 over the average of the CPI for the previous twelve-month period was 25.35 per cent, showing a 5.99 per cent increase compared to 19.36 per cent recorded in January 2023.

Food inflation

The food inflation rate in January 2024 was 35.41 per cent on a year-on-year basis, which was 11.10 per cent points higher compared to the rate recorded in January 2023 (24.32 per cent).

The bureau said the rise in food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, oil and fat, fish, meat, fruit, coffee, tea, and cocoa.

“On a month-on-month basis, the food inflation rate in January 2024 was 3.21 per cent, this was 0.49 per cent higher compared to the rate recorded in December 2023 (2.72 per cent).”

It explained that the rise in food inflation on a month-on-month basis was caused by a rise in the rate of increase in the average prices of potatoes, yam & other tubers, bread and cereals, fish, meat, tobacco, and vegetables.

“The average annual rate of food inflation for the twelve months ending January 2024 over the previous twelve-month average was 28.91 per cent, which was a 7.38 per cent points increase from the average annual rate of change recorded in January 2023(21.53 per cent),” the report said.