Nigeria’s consumer prices rose 28.2 percent in November largely on the back of the continued naira depreciation and higher fuel prices, highlighting the dire state of the economy ahead of Christmas.
The Consumer Price Index report released by the National Bureau of Statistics on Friday showed that inflation rose to a new 18-year high by an increase of 0.87 percent to 28.20 from 27.33 percent in the previous month.
The report also revealed that food inflation, which constitutes 50 percent of the inflation rate, rose to 32.84 percent in October, the highest in 18 years, from 31.52 percent in September.
The rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruit, meat, vegetables, milk, cheese, and eggs.
Analysts see a continuous rise
Analysts at Financial Derivatives Company Limited projected an increase of 27.50 percent.
“Our forecast is that headline inflation will increase marginally by 0.17 percent to 27.50 percent (an 18-year peak). The food and core sub-indices are expected to witness marginal increases, rising to 31.8 percent and 22.72 percent respectively,” its December Economic Splash noted.
Inflation will continue to rise in early 2024 due to market reforms and persistent currency volatility on the black market, according to Bismarck Rewane, managing director/chief executive officer of Financial Derivatives Company Limited.
With the country’s inflation showing no signs of abating any time soon, the Central Bank of Nigeria (CBN) is expected to maintain a tight monetary policy stance in 2024, according to Rewane “The CBN to maintain monetary policy tightening to tame inflationary pressures.”
The Economist Intelligence Unit (EIU), the research and analysis division of the Economist Group, said “Inflation will consistently exceed the 9 percent target ceiling and real short-term interest rates will be negative, as we expect the CBN to prioritise stimulus over its price stability mandate.”
Read also: Inflation, exchange rate pressures to decline in 2024— CBN
Similarly, a report by analysts at KPMG has projected that inflation to hit 30 percent by December 2023 as a result of the combined influence of fuel subsidy removal and foreign exchange liberalisation.
A breakdown of the NBS’ latest consumer price index report shows that food and non-alcoholic beverages contributed the most (14.61 percent) to the increase in the headline index, followed by housing water, electricity, gas, and other fuel (4.72 percent), clothing and footwear (2.16 percent), transport (1.84 percent), furnishings and household equipment and maintenance (1.42 percent) and education (1.11 percent).
Read also: Nigeria’s surging inflation fuels boom in second-hand shopping
Others are health (0.82 percent), miscellaneous goods and services (0.45percent), restaurants and hotels (0.33 percent), alcoholic beverages, tobacco and kola (0.30 percent), recreation and culture (0.19), and communication (0.19 percent).
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