Nigeria’s economic challenges, exacerbated by economic policies, nationwide insecurity, and rising production costs, have pushed the country’s inflation rate to one of the highest in Africa. The National Bureau of Statistics (NBS) reported on Wednesday that Nigeria’s headline inflation rate increased to 33.69 percent in April 2024, up from 33.20 per cent in March 2024.
The nation’s statistics bureau said on Wednesday that Nigeria’s headline inflation rate increased to 33.69 per cent relative to the March 2024 headline inflation rate which was 33.20 per cent, according to the nation’s statistics bureau. Looking at the movement, the April 2024 headline inflation rate showed an increase of 0.49 per cent points when compared to the March 2024 headline inflation rate, the Nigerian Bureau of Statistics (NBS) stated on Wednesday.
On a year-on-year basis, the headline inflation rate was 11.47 per cent points higher compared to the rate recorded in April 2023, which was 22.22 percent
The current figure shows that Nigeria is facing profound challenges worse than most of its peers in Africa, edging to the top of the list of countries worst hit by inflation in Africa. In a recent World Bank report titled “Addressing Inequality to Revitalise Growth and Alleviate Poverty in Africa,” Nigeria was ranked number 4th in the countries with the highest rate of inflation, behind Zimbabwe, Sierra Leone and Malawi.
The food inflation rate in April 2024 was 40.53 percent on a year-on-year basis, which was 15.92 percent points higher compared to the rate recorded in April 2023 (24.61 percent).
The rise in food inflation on a year-on-year basis was caused by increases in prices of the following items: millet flour, garri, bread, wheat flour prepacked, Semovita, yam tuber, etc.
Commenting on the latest inflation figures, Chief Executive of Center for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf noted that the persistent inflationary pressures in the Nigerian economy remains a major cause for concern because of the implications for purchasing power and operating costs for businesses.
Noting that the decline in the month on month inflation both for headline inflation and food inflation, was encouraging, he pointed out that the key inflation drivers are yet to significantly moderate.
“These include the naira exchange rate, transportation costs, logistics challenges, insecurity in farming communities and structural bottlenecks to production. These are largely supply side issues which are being addressed by the fiscal authorities. “Meanwhile the exchange rate benchmark for the computation of import duty continues to be a major concern to businesses as it has become a major inflation driver.
“We again urge the CBN to peg the rate at between N800 -N1000/dollar to be reviewed quarterly. This is necessary to reduce the pass through effect of heightening trade cost on inflation.
“The commencement of domestic refining of petroleum products by the Dangote Refinery is a remarkable upside for the economy. It is expected to have a considerable moderating effect on energy cists and inflation in the near term.”
The CPPE CEO also urged the monetary policy Committee to soften its monetary tightening stance for the time being, saying businesses are yet to recover from the shocks of the recent bullish rate hikes.
“The monetary instruments should be put on pause while fiscal policy tools address supply side factors in the inflation dynamics.
The current administration which took office in May last year has embarked on aggressive policy reforms, including removal of gasoline subsidy and electricity tariff while also introducing more taxes which some experts and labour unions described as anti people and unproductive. This week, the workers union protested against the hike in electricity tariff by about 300 basis points.
Meanwhile, the Bola Tinubu-led government says the economic reforms would have positive effect on economic recovery and growth with a promise to create an enabling environment for private businesses to operate and create jobs, a promise the labour union described as unreliable.
The normalisation of international supply chains and gradual drop in commodity prices globally is yet to reflect in Nigeria where prices of commodities are on a steady rise, amidst exchange rate volatility and inflationary pressure.
The Central Bank of Nigeria in its last meeting raised the interest rate benchmark to 24.75 per cent to tame inflation and control money supply. The CBN Governor Olayemi Cardoso said recently that interest rates will remain elevated until the inflation rate recedes, as reported by the Financial Times on Monday. Cardoso emphasised the adoption of orthodox policies to combat inflation, which soared to 33.20 per cent in March from 31.70 percent in February.
According to the NBS figure, on a month-on-month basis, the headline inflation rate in April 2024 was 2.29 per cent, which was 0.73 per cent lower than the rate recorded in March 2024 (3.02 per cent). This means that in the month of April 2024, the rate of increase in the average price level is less than the rate of increase in the average price level in March 2024.
The average annual rate of food inflation for the 12-month ending April 2024 over the previous 12-month average was 32.74 percent, which was a 9.52 per cent points increase from the average annual rate of change recorded in April 2023 (23.22 percent).
The percentage change in the average CPI for the twelve months ending April 2024 over the
average of the CPI for the previous twelve-month period was 28.10 per cent, showing a 7.28 per cent in-
crease compared to 20.82 percent recorded in April 2023.
On a year-on-year basis, in the month of April 2024, the Urban inflation rate was 36 per cent, which was 12.61 percent points higher compared to the 23.39 per cent recorded in April 2023. On a month-on-month basis, the Urban inflation rate was 2.67 percent in April 2024, this was 0.50 per cent points lower compared to March 2024 (3.17 per cent). The corresponding 12-month average for the urban inflation rate was 30.02 per cent in April 2024. This was 8.53 percent points higher compared to the 21.50 per cent reported in April 2023.
The Rural inflation rate in April 2024 was 31.64 per cent on a year-on-year basis; this was 10.50 per cent higher compared to the 21.14 per cent recorded in April 2023. On a month-on-month basis, the Rural inflation rate in April 2024 was 1.92 per cent, down by 0.95 per cent points compared to March 2024
(2.87 per cent).