Nigeria is currently facing a significant economic challenge as the country’s inflation rate has surged to 29.9% in January 2024, according to reports from the National Bureau of Statistics (NBS). This alarming increase from the previous month’s rate of 28.92% highlights the mounting inflationary pressures gripping the nation’s economy.
Food inflation, in particular, has soared to a staggering 35.41% in January 2024. This sharp rise is attributed to significant price hikes across essential food items such as bread, cereals, potatoes, yams, oils, fats, fish, meat, fruits, as well as coffee, tea, and cocoa. The increase in food prices has put immense pressure on the purchasing power of consumers and exacerbated socio-economic challenges across the country.
The headline inflation rate, which includes both food and non-food items, showed an increase of 0.98 percentage points compared to December 2023. On a year-on-year basis, January 2024 saw an inflation rate of 8.08 percentage points higher than the same period in 2023. This indicates a worrying trend of rising inflation in the country.
Digging deeper into the findings, the core inflation rate, which excludes volatile agricultural produce and energy prices, surged to 23.59% year-on-year in January 2024. This metric provides insight into the underlying inflationary trends within the economy.
Both urban and rural areas experienced significant increases in inflation, with the urban inflation rate soaring to 31.95% and the rural inflation rate standing at 28.10%. These figures exacerbate the cost of living for households nationwide, further straining their financial stability.
The current inflationary pressures in Nigeria have prompted concerns and demands for solutions to the economic crisis. Protests have broken out in different parts of the country, with citizens expressing their frustration over the high cost of living. Northern traditional rulers and the Nigerian Bar Association have also decried the hardship in the country, which has been precipitated by the fuel subsidy removal, resulting in higher transport costs and food inflation.
The mounting inflation rate poses a significant challenge for the Central Bank of Nigeria’s monetary policy committee. There is increasing pressure on the committee to consider raising interest rates at its upcoming meeting in February 2024.