Nigeria’s inflation rises sharply  to 33.95% in May 2024-NBS

Business a.m.

The National Bureau of Statistics (NBS) has released the latest inflation data for Nigeria, which revealed an increase in the headline inflation rate from 33.69 percent in April 2024 to 33.95 percent in May 2024, marking a rise of  0.26 percentage points in a single month.

According to the National Bureau of Statistics’ May 2024 inflation report, the headline inflation rate, on a year-on-year basis, recorded a 11.54 percentage point increase when compared to the May 2023 inflation rate of 22.41 percent, 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 May 2024 stood at 2.14 percent, a marginal 0.15 percent decrease from the previous month’s rate of 2.29 percent in April 2024. The comparatively smaller rate of price increase month-over-month suggests a slower rate of inflationary pressure in May 2024 compared to the previous month.

The percentage change in the average consumer price index (CPI) for the twelve months ending May 2024 over the average of the CPI for the previous twelve-month period was 29.06 percent, representing a 7.86 percent increase compared to 21.20 percent recorded in May 2023.

The recent inflation report from the NBS also revealed worrisome figures in the urban CPI category, with year-on-year inflation rate in May 2024 reaching 36.34 percent. This represents a 12.61 percentage point increase from the 23.74 percent recorded in May 2023. On a month -on-month basis, the urban inflation rate was 2.35 percent in May 2024, 0.32 percentage points lower compared to April 2024’s 2.67 percent. The corresponding twelve-month average for the urban inflation rate was 31.07 percent in May 2024. This was 9.12 percentage points higher compared to the 21.95 percent reported in May 2023.

The inflation report for May 2024 also shed light on the situation in the rural CPI category, which recorded a substantial year-on-year inflation rate of 31.82 percent, a 10.63 percentage point increase from the 21.19 percent recorded in May 2023. 

On a month-on-month basis, the rural inflation rate in May 2024 was 1.94 percent, up by 0.02 percentage points compared to 1.92 percent in April 2024. The corresponding twelve-month average for the rural inflation rate in May 2024 was 27.27 percent. This was 6.76 percentage points higher compared to the 20.50 percent record in May 2023. 

The inflationary pressures on the food sector in Nigeria continued to intensify in May 2024, with the year-on-year food inflation rate jumping to 40.66 percent. This represents a 15.84 percentage point increase from the already high 24.82 percent rate recorded in May  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 semovita, oatflake, yam flour prepackage, garri, bean, etc (which are under bread and cereals class), Irish potatoes, yam, water yam, etc (under potatoes, yam and other tubers class), palm oil, vegetable oil, etc (under oil and fat), stockfish, mudfish, crayfish, etc (under fish class), beef head, chicken-live, pork head, bush meat, etc (under meat class). 

Like the month-on-month headline inflation, the month-on-month Food inflation rate in May 2024 was 2.28 percent, also showing a decrease of 0.22 percent compared to the 2.50 percent rate recorded in April 2024.

The fall in the food inflation on a month-on-month basis was attributed to a fall in the rate of increase in the average prices of palm oil, groundnut oil (under oil and fats class), yam, Irish potatoes, cassava tuber (under potatoes, yam & other tubers class), wine, Bournvita, Milo, Nescafe (under coffee, tea and cocoa class).

The average annual rate of Food inflation for the twelve months ending May 2024 over the previous twelve-month average stood at 34.06 percent, which was 10.41 percentage points increase from the 23.65 percent change recorded in May 2023.

The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy stood at 27.04 percent in May 2024 on a year-on-year basis; up by 7.21 percent when compared to the 19.83 percent recorded in May 2023. The highest increases were recorded in prices of rents (actual and imputed rentals for housing class), bus journey intercity, taxi journey per drop, etc (under passenger transport by road class), accommodation service, and X-ray photography, consultation fee of a medical doctor, laboratory service, etc (under medical services class). 

The month-on-month Core inflation rate like the headline and food also fell to 2.01 percent in the month under review from 2.20 percent recorded in April 2024, showing a decline of 0.18 percent. The average twelve-month annual inflation rate was 23.45 percent for the twelve months ending May 2024; this was 5.34 percentage points higher than the 18.11 percent recorded in May 2023.