High food prices push inflation to 34.6%, 28-year high

According to the latest report by the National Bureau of Statistics (NBS), Nigeria’s inflation rate rose to 34.6 per cent in November 2024, up from 33.88 per cent in October. This is a  0.72 percentage point increase, as well as the highest so far in 28 years.

On a year-on-year basis, the Headline inflation rate was 6.40% points higher than the rate recorded in November 2023 (28.20%). This shows that the Headline inflation rate (year-on-year basis) increased in November 2024 compared to the same month in the preceding year (i.e., November 2023).

Furthermore, on a month-on-month basis, the Headline inflation rate in November 2024 was 2.638%, 0.002% points lower than the rate recorded in October 2024 (2.640%). This means that in November 2024, the rate of increase in the average price level is slightly lower than the rate of increase in the average price level in October 2024.

Analysts at Financial Derivatives had earlier projected that the inflation rate would rise further to 34.64 per cent in November. The company based its forecast on its Lagos market survey and regression model. The 0.76 per cent increase, it said, was to be driven by seasonal factors and cost pressures, resulting in higher prices compared to the corresponding period in 2023.

The food and core sub-indices were expected to move with headline inflation, rising to 40.02 per cent and 29.38 per cent, respectively, especially eggs, rice, vegetable oil, and sardines.

FDC analysts said monthly inflation, which is a more accurate measure of current inflation than annual inflation, is also projected to increase to 2.67 per cent (annualised at 37.25 per cent) from 2.64 per cent.

According to a statement from FDC, “Since core inflation has remained more sticky relative to the headline and food inflation, it will suggest that Nigerian inflation is more structural than transient.

“Therefore, inflationary pressures could persist if monetary tightening is not complemented by other economic policies.”