Economists have linked the nation’s rising inflation to the continued depreciation of the naira and high fuel prices.
They spoke as the country’s inflation hit 29.90 percent for January 2024.
The new data from the National Bureau of Statistics on Thursday showed that Nigeria’s inflation rate climbed to 29.90 percent in January 2024 from 28.92 percent recorded in the previous month
January’s inflation rate of 0.98 percent increase reflects that the inflation rate in the country is yet to slow down, puncturing projections by the Central Bank Governor, Yemi Cardoso, to reduce inflationary pressure this year.
According to its Consumer Price Index and inflation report, major contributors to inflation were food and non-alcoholic beverages (15.49 percent), housing, water, electricity, gas, and other fuel (5.00 percent).
Others include clothing and footwear (2.29 percent), transport (1.95 percent), furnishings and household equipment and maintenance (1.50 percent), education (1.18 percent), and health (0.90 percent).
The CPI measures the average change over time in the prices of goods and services consumed by people for day-to-day living.
The development further adds pressure on the Central Bank’s monetary policy committee to sharply raise interest rates at a February 26-27 meeting — its first in seven months.
The report read, “In January 2024, the headline inflation rate increased to 29.90 percent relative to the December 2023 headline inflation rate which was 28.92 percent.
“Looking at the movement, the January 2024 headline inflation rate showed an increase of 0.98 percent points when compared to the December 2023 headline inflation rate. Similarly, on a year-on-year basis, the headline inflation rate was 8.08 percent points higher compared to the rate recorded in January 2023, which was 21.82 percent.
“This shows that the headline inflation rate (year-on-year basis) increased in January 2024 when compared to the same month in the preceding year (i.e., January 2023).
“Furthermore, on a month-on-month basis, the headline inflation rate in January 2024 was 2.64 percent which was 0.35 percent higher than the rate recorded in December 2023 (2.29 percent).
“This means that in January 2024, the rate of increase in the average price level is more than the rate of increase in the average price level in December 2023.”
In January 2024, the food inflation rate in Nigeria reached a high of 35.41 percent, marking an 11.10 percent increase from January 2023 when it was 24.32 percent.
On a month-by-month comparison, the food inflation rate for January 2024 rose by 3.21 percent, which is 0.49 percent higher than December 2023 (2.72 percent).
The NBS said this increase is driven by higher prices in essential food items like bread, cereals, potatoes, yams, oils, fats, fish, meat, and fruits, as well as coffee, tea, and cocoa.
However, the average annual rate of food inflation for the 12 months leading to January 2024 increased to 28.91 percent, showing a 7.38 percent rise from the 21.53 percent recorded in January 2023.
The inflation rate in cities for the reported month was 31.95 percent, while in rural areas, it was slightly lower at 28.10 percent.
Recently, protests erupted across the country in response to the high cost of living. Citizens in Niger, Kano, Kogi, Ondo, and other states demanded solutions to the economic crisis.
Despite the government’s promise to release grains for the poor, the prices of essential commodities remain high.
Recently, the World Bank disclosed that the continued spike in inflation would push a further 2.8 million people into poverty by 2023’s end.
SOURCE: PUNCHNG
