Nigeria’s inflation slows to 32.15% in August amid high food prices

BY MOTOLANI OSENI

Nigeria’s headline inflation rate eased to 32.15 per cent in August 2024, a slight improvement from the 33.40 per cent recorded in July, according to the latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS).

This marks the second consecutive month of deceleration in inflation, reflecting a 1.25 percentage point drop month-on-month.

Despite the short-term decline, inflation remains significantly higher on an annual basis. The August 2024 inflation rate is 6.35 percentage points above the 25.80 per cent recorded in the same month last year, highlighting the persistent inflationary pressure over the past year.

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On a month-to-month basis, the inflation rate stood at 2.22 per cent in August 2024, slightly down from July’s rate of 2.28 per cent. This suggests a slower pace of price increases compared to the previous month.

Food Prices Remain Elevated

Food inflation, a major driver of Nigeria’s rising cost of living, reached 37.52 per cent year-on-year in August 2024, an 8.18 percentage point jump from the 29.34 per cent recorded in August 2023. However, on a month-on-month basis, food inflation slightly decreased to 2.37 per cent, down from 2.47 per cent in July 2024.

The NBS report indicated that the average annual food inflation rate for the twelve months ending August 2024 was 36.99 per cent, showing a sharp rise compared to the 25.01 per cent average recorded over the same period last year. This ongoing surge in food prices is a critical concern for households across the country, particularly as Nigeria faces challenges related to food production and distribution.

Core Inflation and Sectoral Impact

Core inflation, which excludes volatile items such as food and energy, stood at 27.58 per cent year-on-year in August 2024, reflecting a 6.43 percentage point increase compared to August 2023. On a month-to-month basis, core inflation slightly rose to 2.27 per cent, up from 2.16 per cent in July.

The NBS report highlighted significant price increases in key services such as rent, transportation (including intracity bus and motorcycle fares), medical services, and accommodation. These rising costs have a direct impact on the daily lives of Nigerians and contribute to the broader inflationary pressures facing the economy.

Urban vs Rural Inflation

Inflation rates varied between urban and rural areas. Urban inflation in August 2024 reached 34.58 per cent year-on-year, up by 6.89 percentage points from the 27.69 per cent recorded in August 2023. Month-on-month, urban inflation stood at 2.39 per cent, slightly down from July’s 2.46 per cent.

Rural inflation, while slightly lower, also showed a significant year-on-year increase, rising to 29.95 per cent in August 2024 compared to 24.10 per cent in August 2023. On a month-on-month basis, rural inflation edged down to 2.06 per cent, from 2.10 per cent in July.

Economic Outlook

While the recent slowdown in headline inflation offers some relief, the high food prices and persistent core inflation continue to pose challenges for Nigeria’s economic stability.

The government and policymakers face mounting pressure to address the factors driving inflation, including disruptions in food supply chains, rising transportation costs, and high demand for essential services.

As inflation remains elevated, Nigerian households continue to grapple with the rising cost of living, while businesses struggle to manage escalating operational costs. Whether this recent cooling of inflation will become a longer-term trend remains to be seen.