Nigeria's Inflation Hits 34.6% in November 2024: Soaring Food Prices Drive Cost of Living Up

 

Nigeria’s inflation rate surged to 34.6% in November 2024, marking a 0.72% increase from October’s rate of 33.88%. While the inflation rate remains high, there is growing optimism among Nigerians that it could begin to slow over the next six months.

This data was revealed in the Inflation Expectations Survey Report for November, published by the Statistics Department of the Economic Policy Directorate at the Central Bank of Nigeria (CBN). The report noted that the Consumer Price Index (CPI) also indicated a notable year-on-year rise, with the November 2024 rate 6.4 percentage points higher than the 28.2% recorded in November 2023.

The report stated, “In November 2024, the headline inflation rate stood at 34.60%, up from 33.88% in October. This reflects a 0.72 percentage point increase. Compared to November 2023, the headline inflation rate was 6.40 percentage points higher, marking a significant year-on-year rise.”

The sharp rise in inflation is largely driven by soaring food prices, which continue to squeeze Nigerian households. On a month-on-month basis, the inflation rate showed a slight slowdown, rising by 2.638% in November compared to 2.640% in October. This marginal dip suggests a slower pace of price increases but still underscores the ongoing challenges consumers face.

Food inflation, in particular, has reached a striking 39.93%, up from 32.84% in the same period last year. Staple foods like yam, rice, maize, and palm oil have seen significant price hikes, contributing to this surge. Additionally, items such as guinea corn, millet, and meat have experienced notable price increases.

On a monthly basis, food inflation rose by 2.98%, slightly higher than the 2.94% increase in October, driven by higher prices for fish, rice, dairy products, and meat. Over the 12-month period ending November 2024, the average food inflation rate stood at 38.67%, an increase of 11.58 percentage points from the previous year's rate of 27.09%.

Core inflation, which excludes food and energy prices, also rose sharply, reaching 28.75% in November 2024, compared to 22.38% in the same month last year. This increase reflects rising costs in transportation, housing, and personal services, with the most significant hikes seen in taxi fares, bus fares, rents, and personal grooming services. On a monthly basis, core inflation decreased slightly to 1.83% in November, down from 2.14% in October, but the annualized rate continues to climb.

The 12-month average for core inflation was 26.64%, up from 20.35% in November 2023, reflecting broader economic pressures beyond just food.

Regional inflation variations are also notable. Bauchi, Kebbi, and Anambra recorded the highest year-on-year inflation rates at 46.21%, 42.41%, and 40.48%, respectively, while Delta, Benue, and Katsina had the lowest rates, ranging from 27.47% to 29.57%. In terms of monthly inflation, Yobe, Kebbi, and Kano saw the highest increases at 5.14%, 5.10%, and 4.88%, respectively, while Adamawa, Osun, and Kogi recorded the lowest rises.

Food inflation varied regionally as well. Sokoto, Yobe, and Edo had the highest year-on-year food inflation rates at 51.30%, 49.69%, and 47.77%, respectively, while Kwara, Kogi, and Rivers had slower increases, with year-on-year rates of 31.39%, 32.95%, and 33.27%, respectively. Month-on-month, Yobe, Kano, and Kebbi saw the steepest increases in food inflation at 6.52%, 5.95%, and 5.68%, respectively.

In urban areas, inflation stood at 37.10%, a sharp increase from 30.21% in November 2023, while rural inflation rose to 32.27%, up by 5.84 percentage points from the previous year. Urban inflation rose by 2.77% month-on-month, while rural inflation was slightly lower at 2.51%. The 12-month average for urban inflation was 35.07%, reflecting a 9.62 percentage point increase from the previous year, while rural inflation had an average of 30.71%, up by 8.00 percentage points.

Despite the persistent rise in inflation, analysts have projected a slight decrease in inflation for December, with some expecting a drop to 34%. This prediction is based on the effects of tightening monetary policies and higher interest rates. However, even if inflation decreases slightly, it will still remain far from the Central Bank of Nigeria’s target of 21.4% for the year. In November, the CBN’s Monetary Policy Committee raised the benchmark interest rate to 27.50%.

Ahead of the release of November’s inflation data, analysts at Meristem Securities had predicted a higher inflation figure of 34.64%, with food inflation expected to reach 40.03%. While food inflation came in at 39.93%, core inflation exceeded expectations, reaching 28.75%, surpassing Meristem’s forecast of 26.61%.

The CBN’s Inflation Expectations Survey Report highlighted that businesses and households expect inflation to gradually ease over the next six months. However, inflation is still viewed as high, particularly by households, with small businesses reporting the lowest inflation perceptions. Additionally, those in urban areas and those earning between 100,001 and 150,000 Naira per month perceive inflation more acutely. Key drivers of inflation expectations include energy costs, transportation, exchange rates, and insecurity.