BREAKING: Nigeria’s inflation rose to 32.70% in September 2024 – NBS

The National Bureau of Statistics (NBS) has reported that Nigeria’s inflation rate surged to 32.70% in September 2024, marking a significant increase from the previous month. This jump represents the highest inflation rate the country has seen in recent years, intensifying concerns about the cost of living and economic stability.

According to the NBS report, the sharp rise in inflation is largely driven by escalating food prices, increased transportation costs, and the continued depreciation of the naira. The spike in inflation comes amidst ongoing economic challenges, including foreign exchange shortages, rising fuel prices, and supply chain disruptions.

Breakdown of Inflation Drivers

The September 2024 inflation figure reflects a broad-based increase in prices across various sectors, with food inflation remaining a key driver. The cost of essential staples such as rice, maize, and bread has surged due to supply constraints, worsened by insecurity in key agricultural regions and erratic weather patterns affecting crop yields.

Additionally, the hike in transportation costs, following the full deregulation of fuel prices and the removal of subsidies earlier in the year, has further compounded the inflationary pressure. As fuel prices rise, the cost of logistics and transportation of goods has increased significantly, pushing up the prices of goods and services.

The depreciation of the naira against major foreign currencies has also contributed to inflation, making imports more expensive and further straining local businesses that rely on imported goods and raw materials.

Impact on Households and Businesses

The rise in inflation has hit Nigerian households hard, as the purchasing power of consumers continues to decline. Many families are struggling to afford basic necessities, including food, healthcare, and education. With wages stagnant and unemployment still high, the economic pressure on the average Nigerian is becoming unbearable.

For businesses, particularly small and medium-sized enterprises (SMEs), the high inflation environment has resulted in rising operational costs. Many companies are facing difficulties in maintaining profit margins as they contend with higher costs for raw materials, transportation, and energy. Some businesses have resorted to increasing prices to stay afloat, which in turn exacerbates the inflationary spiral.

Government Response and Economic Outlook

In response to the rising inflation, the Central Bank of Nigeria (CBN) has continued to tighten monetary policy, raising interest rates in an effort to curb inflation. However, the effectiveness of this strategy remains in question, as structural issues such as food supply bottlenecks, exchange rate volatility, and energy costs continue to drive inflation.

The Nigerian government has also announced plans to boost domestic production, particularly in agriculture and manufacturing, to reduce the country’s reliance on imports and ease inflationary pressures. However, experts warn that these measures will take time to yield results, and the immediate outlook remains challenging.

Global and Regional Implications

Nigeria’s inflation crisis is not occurring in isolation. Many other emerging economies are grappling with similar issues as global inflationary pressures, exacerbated by geopolitical tensions and supply chain disruptions, continue to affect the cost of food and energy. The situation in Nigeria, however, is compounded by local factors such as insecurity, policy inconsistencies, and weak infrastructure.

Conclusion

The surge in inflation to 32.70% in September 2024 is a significant economic challenge for Nigeria, with far-reaching implications for households, businesses, and the broader economy. As the country navigates this difficult period, urgent actions are needed to address the structural issues driving inflation and to provide relief to citizens struggling with rising costs. Without decisive intervention, the inflationary trend could further destabilize Nigeria’s already fragile economy.