Emmanuel Ochayi
Nigeria’s inflation rate has risen for the 16th consecutive month, reaching 33.69% in April 2024.
This increase is attributed to a surge in food prices, electricity tariffs, and transportation costs. The National Bureau of Statistics (NBS) reports that the average price of imported food commodities has risen to its highest level, reaching 34% in one year.
Despite the government’s efforts to address the high costs of foodstuffs and economic hardship, internal and external factors have increased the nation’s dependence on food imports.
The inflation rate has risen significantly over the past year, with a month-over-month increase of 0.49% points and a year-over-year increase of 11.47 percentage points.
Core inflation, excluding farm produce and energy costs, has quickened to 26.8%, while food price growth has accelerated to 40.5%. The acceleration raises the prospect of another interest-rate hike when the central bank’s monetary policy committee meets next week.
Kogi remains the most expensive state, with an all-items inflation rate of 40.84%, while Kwara, Ondo, Osun, and Akwa-Ibom follow closely. Lagos state has experienced the highest surge in food and all items inflation, with a 4.74% and 4.52% increase, respectively.
Economists attribute the rate increase to renewed pressure on the Naira and heightened food prices, exacerbated by seasonality. This may force the CBN to raise interest rates by 50bps or 100 basis points, in line with other central banks worldwide.
“The sustained uptick in the general price level was mainly due to a surge in the food basket… This implies that Nigeria’s inflation is more structural than transient.” – Financial Derivatives company economists.
“CBN is right on track with what needs to be done to rein in inflation. The MPC meets next week, and expectations are for either a 50bps or 100 basis points increase, in line with most other Central Banks in the World.” – Financial Derivatives company economists.
