More hardships for Nigerians as inflation hits 31.7%, worse in 28years

Consumer prices remain stubbornly elevated in Nigeria, as the February Consumer Price Index (CPI) reading otherwise known as inflation, released yesterday by the National Bureau of Statistics (NBS) indicated that headline inflation scaled by 1.8 percentage points (ppts) to 31.7%, the highest level since April 1996.

The inflation rate, which was a negative surprise to analysts, outpaced the Bloomberg consensus estimate of 31.3% and the 31.1% projection of analysts at CardinalStone Finance, a Lagos-based investment house.
The unabated inflation pressure indicates that Nigeria remains within the top 10 countries with the highest inflation reading in Africa.

Most inflationary pressure in Nigeria remains skewed to the food basket of the CPI, with the corresponding food inflation reading settling at 37.9% in February 2024, 2.5ppts higher than in January 2024.

The analysts stated: ”This is unsurprising, as our channel checks indicated a material jump in prices of food products like rice, a consequence of the increasing depletion of food reserves and incessant insecurity issues in food-producing regions.

”The rising food prices appear to be hitting Nigerians hard, as it triggered protests in some parts of the country during the review period”.

Also, the International Monetary Fund (IMF) has warned that 8.0% of Nigerians are at a high risk of food insecurity if the current trajectory persists.

Also, the elevated energy prices have continued to pressure transport inflation, with a second-order impact on food prices.

NBS said: “In February 2024, the headline inflation rate increased to 31.70% relative to the January 2024 headline inflation rate which was 29.9 %.

“Looking at the movement, the February 2024 headline inflation rate showed an increase of 1.8 % points when compared to the January 2024
headline inflation rate.

“On a year-on-year (YoY) basis, the headline inflation rate was 9.79% points higher compared to the rate recorded in February 2023, which was 21.91%.

“Furthermore, on a month-on-month (MoM) basis, the headline inflation rate in February 2024 was 3.12%, which was 0.48% higher than the rate recorded in January 2024 (2.64%).

“This means that in February 2024, the rate of increase in the average price level is more than the rate of increase in the average price level in January 2024.”

On food inflation, it stated: “The food inflation rate in February 2024 was 37.92% on a YoY basis, which was 13.57% points higher compared to the rate recorded in February 2023 (24.35%). The rise in food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, fish, oil and fat, meat, fruit, coffee, tea, and cocoa.

“On a MoM basis, the Food inflation rate in February 2024 was 3.79% this was 0.58% higher compared to the rate recorded in January 2024 (3.21%).

“In February 2024, Food inflation on a Year-on-Year basis was highest in Kogi (46.32%), Rivers (44.34%), and Kwara (43.05%), while Bauchi (31.46%), Plateau (32.56%), and Taraba (33.23%) recorded the slowest rise in food inflation on Year-on-Year basis.

"On a MoM basis, however, February 2024 food inflation was highest in Adamawa (5.61%), Yobe (5.60%), and Borno (5.60%), while Cross River (2.08%), Niger (2.56%), and Abuja
(2.60%) recorded the slowest rise in food inflation on MoM basis.