Nigeria’s inflation rate for September 2024 has climbed to 32.70%, following two months of decline in July and August, according to the latest Consumer Price Index report from the National Bureau of Statistics (NBS). The rise, driven primarily by an increase in fuel prices, aligns with the World Bank’s projection of further inflationary pressures in the country.
The new figure marks a 0.55% increase from August’s rate of 32.15%, highlighting persistent price pressures across various sectors. Year-on-year, the inflation rate has surged by 5.98 percentage points compared to 26.72% in September 2023, underscoring the rising cost of living for Nigerians.
In its “Africa’s Pulse” report, the World Bank attributed the inflation spike to the significant hike in gasoline prices. Following the government’s market-based pricing model, which initially tripled fuel prices in May 2023, a further increase of 40-45% was recorded in September 2024. This escalation has impacted transportation and production costs, leading to higher prices for goods and services nationwide.
The NBS report also reveals that food inflation remains a significant contributor, reaching 37.77% in September, up 7.13 percentage points from the same period last year. This increase is primarily due to the rising prices of essential food items such as rice, maize, beans, and yams. On a month-to-month basis, food inflation also rose to 2.64% in September from 2.37% in August.
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Urban areas are feeling the inflationary impact more than rural regions, with urban inflation rising to 35.13% compared to 28.68% in September 2023. Meanwhile, rural inflation stood at 30.49%, up from 24.94% in the same period last year. Bauchi State recorded the highest inflation rate at 44.83%, followed by Sokoto (38.74%) and Jigawa (38.39%). Delta, Benue, and Katsina states saw the slowest inflation growth, at 26.35%, 26.90%, and 27.71%, respectively.
Core inflation, excluding volatile agricultural and energy prices, reached 27.43% in September, a 5.59% increase from the 21.84% recorded the previous year. The most significant price hikes were observed in housing, transportation, and medical services.
In response to these economic conditions, the Central Bank of Nigeria (CBN) raised the monetary policy rate to 27.25%, up from 26.75% in July. This decision, aimed at curbing inflation, surprised financial markets, which had anticipated either stable or lower interest rates following a brief period of easing inflation.
CBN Governor Yemi Cardoso cited rising food inflation, flooding, and surging fuel prices as reasons for tightening monetary policy. Market analysts and experts expressed concern that the inflationary trend could persist due to the naira’s depreciation and increasing fuel costs. Johnson Chukwu, Managing Director of Cowry Asset Management Limited, noted that while the CBN’s tight monetary policy aims to control inflation, structural challenges such as inadequate infrastructure and high energy costs continue to pose significant risks.
Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, highlighted that the inflation surge has weakened purchasing power and investor confidence. He stressed the need for the government to address critical issues, including power supply, logistics, and foreign exchange, while also advocating for improved rural infrastructure to curb food inflation.
Despite policy measures, inflationary pressures in Nigeria remain significant, with experts urging comprehensive strategies to stabilize the economy and restore purchasing power.
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