Nigeria’s inflation rate hits 32.70 % on petrol price hike after 2-month decline

Nigeria’s persistent battle with inflation has reignited, with headline inflation to 32.70 percent in September on petrol price hike, marking a sharp reversal from the two-month decline witnessed earlier.

According to the National Bureau of Statistics, Consumer’s Price Index increased to 32.70 percent in September 2024 from 32.15 percent in August 2024.

In the same vein month-on-month inflation rate for September 2024 went up 0.30 percent to 2.52 percent, from percent recorded in August 2024.

Nigeria’s annual headline inflation dipped in July for the first time in 19 months to 33.40 percent and further down to 32.15 percent in August. Creating the closest gap between the interest rate and inflation this year.

The increase in consumer price index is despite the Monetary Policy Committee 50 basis point hike in interest rate to 27.25 percent, the fifth consecutive hike this year to battle Nigeria’s sticky inflation.

In September, Nigerians experienced an upward review of PMS prices from N597.00 to N855.00. Last week NNPC increased petrol prices from N950/Liter to N998/Liter in Lagos and as high as N1,003 in northeastern states, the second increment in two months as petrol price deregulation takes full effect.

Analysts at Financial Derivatives Company Limited, an economic think tank had projected that headline inflation will increase marginally by 0.22 percent to 32.37 percent on the back of the new petrol price, coupled with exchange rate volatility and floods in northern Nigeria, which will undermine agricultural production .

Food inflation, a significant driver of overall inflation, rose to 37.7 percent in September, from 30.64 percent in September 2023.

Eggs have become inaccessible for several Nigerian homes who cannot afford to pay N6000 to purchase a crate of the poultry products.

The average price of a crate of eggs has hit N6, 000 in various parts of Nigeria, from less than N3000 per crate 12-15 months ago.

Already strained Nigerians disposable income has been put under fresh pressure as the price of transportation and other commodities skyrockets off the increment.

The major driver of the rising price is the skyrocketing cost of inputs, particularly feed, maize and soybeans. High petrol prices have also been blamed for the price jump.

Core inflation, which excludes volatile agricultural produce and energy prices, rose to 27.43 percent in September 2024, from 21.84 percent in September 2023.Indermit Gill, senior vice president World Bank Group, said at the 30th National Economic Summit on Monday that to protect the poor and maintain competitiveness, the central bank must stay focused on inflation.

“ It should resist the lure of short-term capital inflows that might push up the Naira’s value too quickly and crimp non-oil growth. It should rebuild foreign exchange reserves instead as a cushion against oil price volatility,” Gill said.

The second thing is to help every vulnerable household cope with still higher inflation. The government is rolling out a large-scale targeted temporary cash transfer program that has already reached between four and five million households.