Nigeria’s inflation rate rose to 34.80% in December 2024, slightly up from 34.60% in November, according to the latest National Bureau of Statistics (NBS) report. This surge is attributed to increased demand for goods and services during the holiday season, marking a 5.87% year-on-year rise from 28.92% in December 2023. This is the last inflation figure calculated under the current methodology, with a rebasing scheduled later this month. The rebasing will adjust the base year to 2024 to reflect recent economic shifts, including subsidy removals and an expanded inflation basket, which will now include 960 items instead of 740. Economists and policymakers are concerned about the inflationary trend, especially as the data overhaul may likely result in revised, lower inflation figures. Food Inflation Strains Households Food inflation hit a staggering 39.84% in December, up from 33.93% the previous year, significantly impacting household budgets. The NBS observed a 2.44% month-on-month inflation rate, a slight decrease from November’s 2.64%, suggesting that price increases may be slowing. However, the high food inflation is the key driver behind the overall inflation spike. The rise in food prices, particularly for items like yam, sweet potatoes, and beer, was further fueled by the December festive season, when demand for goods and services traditionally peaks. The consequences of this inflationary pressure are most severe for the poor and vulnerable, who struggle to afford staple food items like rice, maize, and tubers. Regional Disparities and Increased Cost of Living Sokoto, Zamfara, and Edo states saw the highest food inflation rates, reaching 57.47%, 46.39%, and 46.32%, respectively. These regions may face worsening food insecurity and social unrest due to skyrocketing food costs. The urban-rural divide is also evident, with urban inflation increasing to 37.29% while rural inflation stood at 32.47%. Urban residents, already dealing with high transportation and housing costs, face more financial strain, while rural households, which depend on agriculture, are struggling with reduced purchasing power, especially if the costs of farming inputs continue to rise. Challenges for Businesses and Investors High inflation diminishes consumers’ purchasing power, leading to reduced demand for goods and services. Small and medium enterprises (SMEs), which are vital to Nigeria’s economy, may particularly feel the strain. Additionally, rising input costs could force companies to reduce profitability, potentially causing layoffs and rising unemployment. Furthermore, sustained inflation and economic instability may deter both foreign and domestic investors. Uncertainty regarding price stability and profitability makes Nigeria less appealing for investment, further impeding economic recovery. Modest Signs of Easing Inflationary Pressure Although inflation remains high, the NBS observed a slight month-on-month decline in inflation growth. Headline inflation in December stood at 2.44%, down from 2.64% in November. Food inflation moderated slightly to 2.66% in December, compared to 2.98% in November. This reduction signals potential relief, though it remains too small to counteract broader inflation trends. While there have been slight declines in some food prices, such as for local beer, fruit juices, and cereals, these improvements are not enough to mitigate the overall inflationary pressures. Core Inflation and Its Impact Core inflation, excluding food and energy, grew by 53 basis points to 29.28%, up from 28.75% in November. Key drivers include rising costs in areas like transportation, housing, and personal services such as haircuts. The core inflation index increased by 41 basis points to 2.24% month-on-month in December, up from 1.83% in November. Outlook for 2025: Possible Economic Stabilization Dr. Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), commented on the persistent inflationary pressures and suggested a positive outlook for 2025. Factors such as stabilization in exchange rates, improvements in foreign reserves, and the potential easing of geopolitical tensions under the incoming U.S. presidency could help moderate inflation in the coming year. To ease inflationary pressures further, CPPE recommended that the Central Bank of Nigeria (CBN) pause on tightening monetary policies and interest rate hikes to reduce operating costs for businesses. Additionally, fiscal policies should focus on reducing the fiscal deficit and decelerating public debt growth. Yusuf also raised concerns about the National Assembly’s focus on revenue generation, stressing that pressure on Ministries, Departments, and Agencies (MDAs) to meet revenue targets could inadvertently fuel inflation and hamper investment. A balance must be struck between generating revenue, boosting investment, and controlling inflation. Key Takeaways: READ ALSO: Follow the LMSINT MEDIA channel on WhatsApp: Join Our WhatsApp Group Hear: Chat on WhatsApp Join our Telegram Chanel.
Nigeria is currently experiencing one of its most difficult economic periods, and for the average consumer, life is becoming increasingly unbearable. With inflation soaring to record levels, the naira’s value plummeting, fuel subsidies removed, and prices skyrocketing across the board, many Nigerians are finding it nearly impossible to survive. The purchasing power of ordinary Nigerians has been severely eroded, forcing families to make agonizing decisions. Millions are struggling to meet even their most basic needs. Mr. Amos Ifeduba, in an interview with Daily Independent, remarked, “The economic situation in Nigeria has reached a point where it is no longer just about struggling to make ends meet, it is about mere survival.” Backing up Ifeduba’s comments, recent data from the National Bureau of Statistics (NBS) reveals that inflation surged to a staggering 26.7% in September 2024, up from 20.77% in the same month the previous year. This inflation spike is largely driven by the skyrocketing prices of food and essential goods. Food inflation alone has shot up by 31.5%, making it increasingly difficult for the average Nigerian to afford basic meals. Staple items such as rice, beans, and cooking oil, once accessible to most families, have now become luxury items. The price of rice has jumped from ₦30,000 per 50kg bag to over ₦50,000 in just a year. Similarly, cooking oil prices have surged by 70%, and beans and other key ingredients have become out of reach for millions. The inflation crisis is further worsened by the removal of fuel subsidies. Fuel prices have risen to ₦1,071 per liter, leading to a chain reaction that has driven up transportation costs, which in turn, has inflated the prices of almost everything, from food to clothing to healthcare. The high cost of transport is preventing many Nigerians from commuting to work or school regularly, limiting their economic opportunities and further deepening their struggles. With the newly approved minimum wage of ₦70,000, many Nigerians still earn far below this threshold. The reality is that for the majority of workers, making ends meet has become an increasingly difficult challenge. In major cities like Lagos and Abuja, the cost of living has outpaced wage growth by a wide margin, and the gap between income and expenses is widening. A recent World Bank survey revealed that more than 60% of Nigerians are now living below the poverty line. The situation is dire: a typical household now spends a significant portion of its income on food, leaving little room for essentials such as education, healthcare, and housing. For many, food now accounts for 80% or more of their monthly expenses, forcing them to cut back on even the most basic needs. The frustration of consumers is palpable. During a recent market survey in Ogba, Lagos, trader Iya Wale expressed her frustration: “Everything don dear, no be small. Dem talk say rice, ewa, and agbado go cheap if we vote for them, but today, we nor fit buy them for market. How person go chop when everything cost like this? Dem no dey feel us for government.” In Ogun State, Mr. Kenneth Ndimele, a civil servant, shared his despair: “I can’t even explain how things have changed. My salary is still the same, but food prices have doubled. My children’s school fees are overdue, and I’m borrowing money to survive. With the high cost of transport, I’m not sure how long I can keep up with this life.” Similarly, Kemi Arokola, a single mother in Surulere, Lagos, said: “I used to stock rice worth ₦30,000, but now I have to spend ₦50,000 because the price of a 50kg bag has gone up to ₦90,000 or more. How am I supposed to feed my kids? They’re skipping meals, and every day I worry about where the next meal will come from. It breaks my heart to see them suffer.” The pressure on consumers is relentless, and it’s not just the poorest Nigerians who are feeling the heat. The middle class, once considered stable, is also being squeezed out of the economy. A report from the African Development Bank (AfDB) reveals that over 70% of middle-class Nigerians have had to cut back on discretionary spending, even on critical areas like healthcare and education. Many are dipping into their savings, or worse, accumulating debt just to survive. The situation has become so dire that many middle-class families are now facing tough choices they never imagined they’d have to make. Economist Mr. Ben Nnamdi commented: “What we’re seeing now is an economy that is fundamentally unsustainable for the average Nigerian consumer. The rise in inflation, the devaluation of the naira, and stagnant wages are eroding the quality of life for millions. Even those once considered financially stable are feeling the pinch.” In response to the crisis, the government has introduced measures such as cash transfers to vulnerable households. However, these interventions are widely seen as insufficient. The ₦8,000 cash transfer, meant to help the poorest Nigerians, is hardly enough to offset the increasing cost of living. For a family spending upwards of ₦20,000 a week on food alone, ₦8,000 is barely a drop in the ocean. Consumer rights advocate Mrs. Yetunde Akinyemi criticized the government’s approach: “While the cash transfers are well-intentioned, they fail to address the underlying issues that are causing the economic hardship. Inflation, fuel prices, and the depreciation of the naira are the real problems, and until these are tackled, the situation will only worsen.” While the government has promised reforms to tackle these challenges, many remain skeptical about the feasibility and effectiveness of these promises. The scale of the crisis demands immediate, large-scale action to relieve suffering. The economic struggles faced by Nigerian consumers are not merely about rising prices—they reflect a deeper systemic failure to provide for the country’s people. Experts argue that comprehensive economic reforms are urgently needed to address inflation, stabilize the naira, and create sustainable sources of income for households. Without these reforms, the pain for consumers will only intensify, and Nigeria risks facing
