Nigeria’s inflation rate is projected to rise to 35.20% in December 2024, driven by persistent price pressures, according to the Cowry Weekly Financial Markets Review & Outlook. This follows a steady upward trend, with inflation climbing to 34.60% in November 2024 from 33.88% in October. Food inflation, which surged to 39.93% year-on-year in November, remains a key contributor to the rising cost of living, compounded by structural challenges such as high energy costs, logistical inefficiencies, and insecurity in agricultural regions.
Despite the Central Bank of Nigeria’s aggressive monetary tightening, with interest rates increased to 27.50% by year-end, inflation has remained unresponsive. Analysts cite seasonal factors like the festive period’s heightened demand for goods and services, alongside systemic issues, as major inflationary drivers. Additionally, naira depreciation and the removal of fuel subsidies have amplified the cost of imports and energy, further straining Nigerian households.
Looking ahead, while base effects may moderate inflationary pressures in 2025, experts warn that the Federal Government’s projected N13.08 trillion budget deficit financing could rekindle inflation. The National Bureau of Statistics plans to release two Consumer Price Index reports in January 2025, introducing new indices such as the services, energy, and farm produce indexes, aiming to provide deeper insights into inflation trends across various sectors.