Kogi, Bauchi, Oyo lead Nigeria’s inflation hotspots index

This ranking, unveiled in the NBS Consumer Price Index report for April 2024, underscores the severe impact of year-on-year inflation rates on the cost of living. The report highlighted a rise in the headline inflation rate to 33.69% in April, up from 33.20% in March. This 0.49% increase is a stark reminder of the ongoing economic challenges facing Nigeria.

Kogi State leads the pack with an alarming year-on-year inflation rate of 40.84%, followed closely by Bauchi at 39.91% and Oyo at 38.37%. In contrast, states like Borno, Benue, and Taraba have seen slower inflationary growth, offering a brief respite from the economic turbulence.

On a monthly basis, the inflation scenario paints a varied picture. Lagos saw the sharpest month-on-month inflation rise at 4.52%, trailed by Ondo at 3.35% and Edo at 3.27%. Meanwhile, Kano, Ebonyi, and Adamawa experienced the slowest monthly increases, reflecting regional disparities in inflationary pressures.

Food inflation, a critical component of the overall inflation rate, has been particularly harsh in Kogi, which recorded a staggering 48.62% year-on-year increase. Kwara and Ondo also faced significant food price hikes, with rates of 46.73% and 45.87%, respectively. In contrast, Adamawa, Bauchi, and Nasarawa saw more modest increases in food prices.

The first quarter of 2024 has been marked by fluctuations in food inflation across Nigeria. Kogi and Kwara consistently topped the charts, while Rivers State, previously a high-ranking state for food inflation, dropped out of the top three, making way for Akwa Ibom.

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Experts attribute the relentless rise in food inflation to a combination of climate change and insecurity. Smallholder farmers, who dominate Nigeria’s agricultural sector and rely on rain-fed farming, are struggling with erratic rainfall, rising temperatures, and drought. These challenges, compounded by supply chain disruptions, have exacerbated food scarcity and driven up prices.

Tobi Awolope, an agricultural economist at the Federal University of Agriculture, Abeokuta, pointed out that the interplay of climate change and insecurity has severely disrupted food production. “The hike in food prices is largely due to decreased food availability. Smallholder farmers are facing unprecedented challenges, from altered rainfall patterns to increased droughts. Additionally, supply chain issues are a major hurdle,” Awolope explained.

Economic factors also play a role. The depreciation of Nigeria’s currency has inflated the cost of imported food commodities, further straining household budgets. Olorunfemi Idris, an economist at Phemmy Gracey Global Ltd., highlighted the impact of the Russia-Ukraine war, which has driven up prices of wheat and fertilizers imported from the conflict zones. “Much of Nigeria’s inflation is driven by a mix of oil subsidies and the fallout from the war in Ukraine,” Idris noted.

Addressing these challenges requires substantial investment in infrastructure. Idris emphasized the need for better transportation networks and storage facilities to reduce post-harvest losses and improve the efficiency of the food supply chain. “Upgrading our road networks, enhancing storage facilities, and implementing effective cold chains can significantly mitigate the impact of inflation,” he asserted.

As Kogi State stands as the most expensive place to live in Nigeria, the nation grapples with the broader implications of rising inflation. The insights from the NBS report underscore the urgent need for strategic interventions to stabilize the economy and ensure sustainable development.