Nigeria’s headline inflation rate rose to 32.7% in September 2024, marking a marginal increase of 0.55% from August, as reported by the National Bureau of Statistics. This uptick follows two months of deceleration and reflects ongoing price pressures across the country. Year-on-year, inflation has climbed by 5.98 percentage points compared to September 2023, attributed largely to the rise in petrol prices, which has driven up transportation and production costs.
The World Bank’s recent Africa’s Pulse report indicates that the surge in fuel prices has made the situation worse by the removal of fuel subsidies and the shift to market-based pricing—has heavily influenced inflationary trends in Nigeria. Petrol prices have risen sharply, leading to significant increases in the cost of goods and services nationwide. Food inflation remains a major contributor, with food prices increasing to 37.77% in September, driven by staple foods such as rice and maize.
Inflation is reportedly more pronounced in urban areas than rural regions, with urban inflation reaching 35.13% in September. Bauchi, Sokoto, and Jigawa recorded the highest year-on-year inflation rates, while Delta, Benue, and Katsina had the slowest increases. Core inflation, which excludes volatile items, rose to 27.43%, driven by rising costs in sectors like housing, transport, and medical services.
In response to these developments, the Central Bank of Nigeria recently raised the monetary policy rate to 27.25% to combat inflation and stabilize the foreign exchange market. Financial experts are concerned about the effectiveness of these measures given structural challenges, such as high fuel costs and logistical bottlenecks. Analysts warn that inflation may continue to rise as factors like naira depreciation and fuel price hikes persist.
