The inflation rate in Nigeria climbed to 34.8% in December 2024, a slight increase from November’s figure of 34.6%, driven primarily by heightened demand for goods and services during the festive season. This was disclosed by the National Bureau of Statistics (NBS) in its latest Consumer Price Index (CPI) report.
Key Highlights from the Report
According to the NBS, the December 2024 inflation rate represents a marginal month-on-month (MoM) increase of 0.20%. On a year-on-year (YoY) basis, however, the inflation rate is significantly higher—5.87% more than the 28.92% recorded in December 2023.
Interestingly, the report noted that although overall inflation rose slightly, the MoM rate of price increases actually slowed. In December 2024, the MoM inflation rate was 2.44%, compared to 2.64% in November 2024, indicating a slower pace of price growth.
Food Inflation Declines
While general inflation edged higher, food inflation saw a slight decline, falling to 39.84% in December 2024 from 39.93% in the preceding month. On a YoY basis, food inflation was still 5.91% higher than in December 2023.
The rise in YoY food inflation was attributed to price increases in essential items such as yam, sweet potatoes, maize, rice, and dried fish. However, the MoM food inflation rate dropped to 2.66%, down from 2.98% in November. The NBS linked this decline to lower prices for items such as local beer, fruit juices, rice, and yams.
Geographically, Sokoto recorded the highest YoY food inflation rate at 57.47%, followed by Zamfara (46.39%) and Edo (46.32%). On the other hand, Ogun (34.24%), Rivers (35.43%), and Kwara (35.58%) experienced the slowest rises in food inflation.
Projections for January
Analysts at Vetiva Capital Management Limited anticipate a slight decrease in the inflation rate for January 2025. They expect food prices to moderate further due to stock carryovers from the main harvest season, although core inflation is likely to remain high due to expected increases in energy costs. Vetiva projects headline inflation for January to settle at 34.55%.
Calls for Policy Adjustments
In light of the inflationary trends, the Center for Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to pause its monetary policy tightening measures. According to the CPPE’s Chief Executive Officer, Muda Yusuf, easing monetary policies could help reduce inflationary pressures. Yusuf also advocated for a reduction in government fiscal spending and a slowdown in the accumulation of public debt.
Outlook for the Economy
As the inflation rate continues to hover at elevated levels, analysts and stakeholders emphasize the importance of policy measures to stabilize prices. The balance between managing inflation and supporting economic growth remains a critical challenge for policymakers in 2025.
