Nigeria’s Inflation Climbs To 31.70% Amid Hike In Food Prices

In February 2024, Nigeria experienced a surge in its inflation rate, climbing to 31.70 percent from the 29.90 percent reported in January of the same year.

The National Bureau of Statistics, in its most recent Consumer Price Index (CPI) and inflation report issued on Friday, disclosed that this uptick represents a 1.80 percent rise.

This suggests that in February 2024, the rate of escalation in the average price level surpassed that of January 2024.

The report read, “In February 2024, the headline inflation rate increased to 31.70 percent relative to the January 2024 headline inflation rate which was 29.90 percent.”

Comparatively, on an annual basis, February 2024’s inflation rate was 9.79 percent higher than the 21.91 percent recorded in February 2023.

Also, the month-on-month headline inflation rate in February 2024 reached 3.12%, an increase of 0.48% from January 2024’s rate of 2.64%.

This indicates that the pace at which average prices rose in February 2024 exceeded the rate of price increase in January 2024.

The NBS further stated, “Looking at the movement, the February 2024 headline inflation rate showed an increase of 1.80 percent points when compared to the January 2024 headline inflation rate. On a year-on-year basis, the headline inflation rate was 9.79 percent points higher compared to the rate recorded in February 2023, which was 21.91 percent.

“This shows that the headline inflation rate (year-on-year basis) increased in the month of February 2024 when compared to the same month in the preceding year (i.e., February 2023).

“Furthermore, on a month-on-month basis, the headline inflation rate in February 2024 was 3.12 percent, which was 0.48 percent higher than the rate recorded in January 2024 (2.64 percent).”

The latest inflationary surge is despite tightened monetary policy by the Central Bank.

At the latest Monetary Policy Meeting, the apex bank increased the benchmark interest rate by 400 basis points to a record 22.75 per cent.
Justifying reasons for the hike, the CBN Governor, Olayemi Cardoso, explained that members considered various scenarios including whether to hold or hike policy and concluded that inflation could become more persistent in the medium term and pose more regulatory issues if not well-anchored.

Thus, members voted for a significantly high policy rate hike to drive down the inflation rate substantially.

He mentioned that the meeting extensively discussed various distortions in the foreign exchange market, particularly the impact of speculators exerting upward pressure on the exchange rate, leading to a significant pass-through effect on inflation.

The consensus reached involved a substantial policy rate hike aimed at effectively reducing inflation.