Nigeria’s inflation soars to 33.88% in October as food, transport costs surge

Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.70% in September, according to the Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS). The 1.18 percentage point increase highlights the intensifying pressure on consumer prices as food and transport costs continue to rise across the country.

On a year-on-year basis, October’s inflation rate was 6.55 percentage points higher than the 27.33% recorded in October 2023, indicating a broadening impact of economic factors affecting consumer prices.

Drivers of Inflation

Food inflation, which has been a significant contributor, rose by 0.30% from September, reaching 2.94% in October. The report attributes this increase to rising prices in key staples, including palm oil, rice, dried beef, fish, and bread. Average annual food inflation over the last 12 months reached 38.12%, up from 26.33% the previous year, marking an 11.79 percentage point increase.

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This persistent rise has largely been driven by multiple factors:

1. Fuel Subsidy Removal: Higher petrol prices—now exceeding N1,050 per litre in Lagos and other states—have increased transportation costs, feeding into higher prices across sectors.
2. Currency Depreciation: The weakening naira has affected import costs, adding strain to local production and distribution.
3. Insecurity and Flooding: Insecurity in agricultural regions and flooding in the agricultural belt have disrupted food supply chains, adding pressure to prices.

Analyst Projections and Economic Outlook

Economists had anticipated inflation to hover around 33.5% for October, given the continued impact of fuel prices and currency challenges. With inflation hitting 33.2% in March and peaking at 34.19% in June, October’s numbers reveal the potential for further price hikes. Projections indicate that inflation could climb beyond 35% by the end of the year, especially if food and energy costs remain high.

Policy Considerations

As Nigeria’s inflation rate trends upward, economic observers are closely watching potential policy actions from the Central Bank of Nigeria (CBN) aimed at managing inflation and stabilizing the currency. For businesses and households alike, the rising inflation continues to shrink purchasing power, highlighting the urgent need for targeted measures to address the escalating costs of essential goods and services.