Nigeria’s mounting inflation woes hits new peak at 33.2% in March 2024

Business a.m.

The National Bureau of Statistics (NBS) has released the latest inflation data for Nigeria, which revealed a marked increase in the headline inflation rate from 31.70 per cent in February 2024 to 33.20 per cent in March 2024, marking a rise of 1.50 percentage points in a single month.

According to the National Bureau of Statistics’ March 2024 inflation report, the headline inflation rate, on a year-on-year basis, recorded a 11.16 percentage point increase when compared to the March 2023 inflation rate of 22.04 per cent, an indication that  the cost of living in Africa’s most populous country has risen significantly within the past year.

Meanwhile, on a month-on-month basis, the inflation rate for March 2024 stood at 3.02 percent, a marginal 0.10 per cent decrease from the previous month’s rate of 3.12 per cent in February 2024. The comparatively smaller rate of price increase month-over-month suggests a slower rate of inflationary pressure in March 2024 compared to the previous month.

The CPI data for March 2024 continues to paint a sobering picture of the state of inflation in Nigeria. The percentage change in the average CPI over the past year, as measured from March 2023 to March 2024, stood at 27.13 per cent. This represents a sharp 6.76 per cent increase over the CPI recorded in March 2023, indicating a significant escalation of inflationary pressures over the past year.

The recent inflation report from the NBS also revealed startling figures in the urban CPI category, with year-on-year inflation rate in March 2024 reaching 35.18 per cent. This represents a 12.11 percentage point increase from the 23.07 per cent recorded in March 2023. Despite the increase in the annual inflation rate, the month-on-month Urban inflation rate remained largely unchanged in March 2024, at 3.17 per cent, recording a minute decrease of just 0.0001 percentage points from February 2024.

The inflation report for March 2024 also shed light on the situation in the rural CPI category, which recorded a substantial year-on-year inflation rate of 31.45 per cent, a 10.37 percentage point increase from the 21.09 per cent recorded in March 2023. 

In contrast to the urban inflation rate, the rural inflation rate on a month-on-month basis saw a decrease of 0.20 percentage points in March 2024, down from 3.07 per cent in February 2024 to 2.87 per cent.

The inflationary pressures on the food sector in Nigeria continued to intensify in March 2024, with the year-on-year food inflation rate jumping to 40.01 per cent. This represents a significant 15.56 percentage point increase from the already high 24.45 per cent rate recorded in March 2023, signaling further deterioration in the affordability of basic foodstuffs for Nigerians. 

The NBS attributed the rise in food inflation on a year-on-year basis to increases in prices of the following items garri, millet, akpu uncooked fermented (which are under the bread and cereals class), yam tuber, water yam (under potatoes, yam, and other tubers class), dried fish sardine, mudfish dried (under fish class), palm oil, vegetable oil (under oil and fat), beef feet, beef head, liver (under meat class), coconut, water melon (under fruit class), Lipton Tea, Bournvita, Milo (under coffee, tea and cocoa class). 

While the food inflation rate experienced a substantial increase on a year-on-year basis in March 2024, the monthly food inflation rate saw a marginal decrease from 3.79 per cent in February 2024 to 3.62 per cent in March 202

The fall in food inflation on a month-on-month basis was caused by a fall in the rate of increase in the average prices of Guinea corn flour, plantain flour etc (under bread and cereals class), yam, Irish Potato, cocoyam (under potatoes, yam & other tubers class), Titus fish, mudfish dried (under fish class), Lipton, Bournvita, Ovaltine (under coffee, tea and cocoa class). 

The average annual rate of Food inflation for the twelve months ending March 2024 stood at a formidable 31.40 per cent, representing an 8.69 per cent point increase from the 22.72 per cent recorded in March 2023. 

The core inflation, which excludes volatile agricultural produce and energy prices, continued to climb in March 2024, reaching 25.90 per cent on a year-on-year basis. This represents a substantial 6.26% point increase compared to the 19.63 per cent recorded in March 2023. The highest increases were recorded in prices of bus journeys within the city (under passenger transport by road class), actual and imputed rentals for housing, consultation fee of a medical doctor (under medical services class), and pharmaceutical products, etc. 

The Core inflation rate on a month-on-month basis climbed to 2.54 per cent in March 2024, registering an increase of 0.37 percentage points from the 2.17 per cent recorded in February 2024. 

On an annual basis, the average twelve-month core inflation rate came in at 22.26 per cent, representing a substantial 5.04 percentage point increase from the 17.22 per cent recorded in March 2023.