Consumer prices in Nigeria continue to present a persistent challenge, with the February Consumer Price Index (CPI) data, also known as inflation, released by the National Bureau of Statistics (NBS) revealing a notable surge. Headline inflation soared by 1.8 percentage points (ppts) to 31.7%, marking its highest level since April 1996.
This inflationary surge caught analysts off guard, surpassing both the Bloomberg consensus estimate of 31.3% and the 31.1% projection of analysts at CardinalStone Finance, a Lagos-based investment firm. Nigeria remains among the top 10 countries in Africa grappling with the highest inflation rates.
The primary driver of inflationary pressures in Nigeria continues to be the food basket of the CPI, with food inflation reaching 37.9% in February 2024, a 2.5ppts increase from January 2024. Analysts attribute this surge to significant price hikes in food products such as rice, stemming from depleting food reserves and ongoing security challenges in food-producing regions. The resultant rise in food prices has sparked protests in various parts of the country.
The International Monetary Fund (IMF) has issued a warning, indicating that 8.0% of Nigerians face high food insecurity risks if the current trajectory persists. Moreover, elevated energy prices continue to exert pressure on transport inflation, subsequently impacting food prices further.
The NBS report underscores the gravity of the situation, stating, “In February 2024, the headline inflation rate increased to 31.70% relative to the January 2024 headline inflation rate of 29.9%. On a year-on-year basis, the headline inflation rate surged by 9.79% points compared to February 2023, which stood at 21.91%.”
Regarding food inflation, the report highlights, “On a year-on-year basis, food inflation in February 2024 reached 37.92%, marking a 13.57% increase from February 2023. This surge was driven by price hikes in bread and cereals, potatoes, yam and other tubers, fish, oil and fat, meat, fruit, coffee, tea, and cocoa.”
The regional breakdown indicates varying degrees of food inflation, with Kogi, Rivers, and Kwara experiencing the highest year-on-year increases, while Bauchi, Plateau, and Taraba recorded comparatively slower rises. Similarly, on a month-on-month basis, Adamawa, Yobe, and Borno witnessed the highest food inflation, contrasting with Cross River, Niger, and Abuja, which experienced relatively slower rises.
In summary, the latest inflation data underscores the urgent need for comprehensive measures to address the underlying factors driving inflationary pressures in Nigeria’s economy, particularly in the food sector, to safeguard the welfare of its citizens and ensure economic stability.
