Inflation rate in Nigeria climbs to 33.95% in May

Nigeria’s inflation rate soared to 33.95% in May 2024, as revealed by the latest data from the National Bureau of Statistics (NBS). This marks a 0.26 percentage point increase from the April 2024 inflation rate, according to the NBS Consumer Price Index report released on Saturday.

The year-on-year analysis shows a substantial increase, with the headline inflation rate rising by 11.54 percentage points from 22.41% in May 2023 to 33.95% in May 2024. This indicates a significant year-over-year inflationary rise.

Conversely, the month-on-month headline inflation rate for May 2024 was 2.14%, slightly lower by 0.15 percentage points compared to April 2024’s rate of 2.29%. The NBS report explained that this suggests a slower rate of price increase in May 2024 compared to April 2024.

Food inflation remains a critical issue, with the rate reaching 40.66% in May 2024 on a year-on-year basis. This is 15.84 percentage points higher than the 24.82% recorded in May 2023. The report attributes this spike to rising prices in several key food items, including Semovita, Oatflake, Yam flour, Garri, Beans (under the Bread and Cereals category), Irish Potatoes, Yam, Water Yam (under Potatoes, Yam, and other Tubers), Palm Oil, Vegetable Oil (under Oils and Fats), and various fish and meat products.

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On a month-on-month basis, the food inflation rate for May 2024 was 2.28%, a decrease of 0.22 percentage points from the 2.50% recorded in April 2024. The NBS noted that this reduction was due to a slower increase in the prices of Palm Oil, Groundnut Oil (under Oils and Fats), Yam, Irish Potatoes, Cassava (under Potatoes, Yam, and other Tubers), and beverages like Wine, Bournvita, Milo, and Nescafe (under Coffee, Tea, and Cocoa).

The average annual food inflation rate for the twelve months ending May 2024 stood at 34.06%, up by 10.41 percentage points from the 23.65% recorded in the same period the previous year.

In response to the escalating inflation, the Central Bank of Nigeria (CBN) raised the interest rate by 150 basis points, from 24.75% to 26.25%, during its Monetary Policy Committee (MPC) meeting in May. This marks the third consecutive increase in the Monetary Policy Rate (MPR) as part of efforts to curb the country’s soaring inflation, which was pegged at 33.69% in April 2024.

The CBN’s move aims to tighten monetary policy and stabilize the economy amidst the ongoing inflationary pressures, underscoring the challenges faced by Nigeria’s economy in maintaining price stability.