Headline inflation, a measure that tracks consumer prices in an economy, increased in Nigeria in October 2024 as people paid more for food, transportation, and energy. Data from the Bureau of Statistics showed inflation accelerated to 33.88% from 32.70% in September. On a year-on-year basis, the rate was 6.55 percentage points higher than the 27.33% recorded in October 2023, highlighting a substantial increase in inflation over the past year.
This will worry policymakers, under immense pressure to lower food prices during harvest season. Recently, a civil society organisation (CSO) called the government to reduce the rising cost of fuel and food items. In June 2024, the government suspended taxes and import duties on food items like maize and wheat for 150 days. None of these actions seemed to have arrested the situation. NBS data showed food inflation hit 39.16% in October.
Core inflation, which excludes the prices of volatile agricultural produce and energy, stood at 28.37% in October 2024 on a year-on-year basis, reflecting an increase of 5.79% compared to the 22.58% recorded in October 2023.
The highest increases were recorded in prices of the following items: Bus Journey within the city, Journey by motorcycle, Bus journey intercity, Rents (Actual and Imputed Rentals for Housing Class), Meal at a local Restaurant (Accommodation Service Class), hair cut service, woman hairbrush, and women’s hairdressing (Hairdressing salons & personal grooming establishments Class).
The Central Bank is expected to adopt a hawkish stance in its next Monetary Policy Committee (MPC) meeting to combat worsening inflation currently at a 30-year high. “I expect them to tighten further,” one analyst told Condia, raising the likelihood of a possible rate hike in the coming weeks.
Samuel Onyekanmi, an analyst at Norrenberger forecast a moderate hike of 25 basis points ahead of the rate-setting meeting scheduled for the 26th of this month.
