Nigeria’s Inflation Surges to 34.6% as Food Prices Worsen Cost-of-Living Crisis

Nigeria’s inflation rate climbed to 34.6% in November 2024, marking a 0.72 percentage point increase from the 33.88% recorded in October. This sustained rise, driven largely by skyrocketing food prices, places an ever-deepening strain on households and businesses across the nation.

The latest figures, published in the Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS) on Monday, underscore a stark year-on-year increase of 6.4 percentage points compared to the 28.2% recorded in November 2023.

The report revealed a significant acceleration in food inflation, which surged to 39.93% in November—up from 32.84% in the same period last year. Staples such as yam, rice, maize, and palm oil have seen sharp price hikes, while items like guinea corn, millet, and meat have also experienced notable increases. Month-on-month food inflation edged up marginally to 2.98%, from 2.94% in October, driven by rising costs of fish, dairy products, and meat.

The country’s core inflation, which excludes food and energy prices, also escalated to 28.75% year-on-year, up from 22.38% a year earlier. This reflects increasing costs in transportation, housing, and personal services, with bus fares, rents, and grooming services recording significant hikes. While month-on-month core inflation slowed slightly to 1.83% in November, broader economic pressures remain unrelenting.

Regional disparities further highlight the uneven impact of inflation. Bauchi, Kebbi, and Anambra states recorded the highest year-on-year inflation rates at 46.21%, 42.41%, and 40.48%, respectively. Conversely, Delta, Benue, and Katsina posted the lowest rates, ranging between 27.47% and 29.57%.

Food inflation disparities were even starker. Sokoto led the table with 51.3% year-on-year food inflation, followed closely by Yobe (49.69%) and Edo (47.77%), while Kwara, Kogi, and Rivers recorded slower increases. Urban areas continue to bear the brunt of inflationary pressures, with urban inflation reaching 37.1% in November, compared to 32.27% in rural regions.

Amid these challenges, analysts and businesses cautiously predict a deceleration in inflation in the months ahead. Asset management firm Arthur Steven Asset Management Limited suggested on Monday that inflation might ease slightly to 34% in December, attributing this projection to tighter monetary policy measures. The Central Bank of Nigeria (CBN) recently raised the benchmark interest rate to 27.5% to tame inflation and attract investors to fixed-income markets.

Nonetheless, the inflation rate remains a far cry from the CBN’s 21.4% target for 2024. The November Monetary Policy Committee meeting underscored the uphill battle policymakers face in controlling inflation while balancing growth.

Interestingly, optimism about inflation’s trajectory emerged in the Inflation Expectations Survey Report for November, published by the CBN’s Economic Policy Directorate. Both households and businesses anticipate a gradual easing of inflation over the next six months, despite acknowledging its current intensity.

Energy costs, transportation, exchange rate volatility, and insecurity remain key drivers of inflation perceptions, with urban residents and higher-income households reporting a heightened awareness of rising prices.

As Nigeria navigates this economic storm, the hope of relief remains fragile. For now, consumers must contend with spiralling costs, while policymakers grapple with the complexities of restoring stability to Africa’s largest economy.