Nigeria’s inflation rate climbed to 32.70% in September 2024, up from 32.15% in the previous month, according to the National Bureau of Statistics (NBS). The Consumer Price Index (CPI), which tracks changes in the prices of goods and services, revealed a 5.98% increase year-on-year, significantly higher than the 26.72% rate recorded in September 2023.
The rise in inflation is largely attributed to higher prices across a range of items in the national goods and services basket compared to August 2024. Month-on-month, inflation edged up to 2.52%, compared to 2.22% in August.
Food Inflation continues to be a major driver, surging to 37.77% year-on-year, a sharp increase from 30.64% in September 2023. The steep rise in food prices was driven by significant price hikes in staples such as guinea corn, rice, maize, beans (classified under bread and cereals), yam, water yam, and cassava (potatoes and tubers). Other items such as coffee, tea, cocoa products (including Lipton and Milo), and cooking oils also saw notable price increases. Month-on-month, food inflation rose to 2.64% in September, compared to 2.37% in August.
Core Inflation, which excludes volatile agricultural and energy prices, surged to 27.43% year-on-year, up from 21.84% in September 2023. The NBS attributed the rise in core inflation to increases in costs for housing rents, intercity transportation, medical services, and other essential services. Month-on-month, core inflation was slightly lower at 2.10% in September, down from 2.27% in August.
Analysis:
The rise in inflation to 32.70% in September 2024 reflects the intensifying pressure on Nigeria’s economy. This persistent inflationary trend, particularly in food prices, signals deepening challenges in supply chain dynamics and agricultural production, compounded by external factors such as global commodity prices and local disruptions.
Food inflation at 37.77% year-on-year is especially concerning, as it directly impacts the most vulnerable populations. The surge in staples like grains, yams, and oils signals difficulties in domestic agricultural production, possibly due to poor harvests, rising input costs, or transportation bottlenecks. This sharp rise also suggests that imported inflation is playing a role, as many of these items are either partially imported or depend on foreign supply chains for inputs like fertilizers.
Core inflation at 27.43% year-on-year highlights broader economic challenges beyond food prices. Rising rents and transportation costs indicate that inflation is being driven by both demand-pull (increased demand for housing and transport) and cost-push (higher production and operational costs) factors. The mention of medical services and consultation fees as inflationary contributors points to a health sector also feeling the strain of rising costs, making essential services less accessible.
Nigeria’s inflation challenge stems from a complex mix of structural issues, including reliance on imports, foreign exchange volatility, and inefficient domestic production. Policies addressing agricultural productivity, transportation infrastructure, and currency stabilization are critical to alleviating these pressures in the medium to long term. However, in the short term, Nigerians are likely to continue facing rising living costs, which could exacerbate socioeconomic tensions.
