National Bureau of Statistics NBS, has said that Nigeria’s headline inflation rate nudged higher by 5 5bps y/y to 32.7 per cent in September, halting the prior two month disinflation outcome. NBS said “In September 2024, the Headline inflation rate was 32.70% relative to the August 2024 headline inflation rate of 32.15%. Reacting to the inflation report Mudal Yusuf, CEO of CPPE said “it is troubling that we are witnessing a resurgence of high inflationary pressures after some few months of respite despite policy measures to tame inflation, especially on the monetary side. Purchasing power had continued to plunge over the past few months. The situation had been further exacerbated by the surging petrol price. After a few months of deceleration, the inflation numbers had returned to a spiralling path. Headline inflation rose to 32.7% in September 2024 as against 32.15% in August 2024, an increase of 0.55%. There was also a marginal increase of 0.30% in month-on-month inflation between August and September. Food inflation maintained its uptrend rising to 37.77% from 37.52% after decelerating in few months ago.
“The reality is that the dynamics driving inflation are yet to be effectively subdued. These factors include the depreciating exchange rate, surging fuel price, rising transportation costs, logistics and supply chain challenges, high energy cost, climate change including resultant incidents of flooding, insecurity in farming communities and structural bottlenecks to production. These are largely supply-side issues. There is also the factor of seasonality of agricultural outputs which activates seasonal price surge in some food crops. Elevated inflationary pressures escalate production costs, weakens profitability, and dampens investors’ confidence. Not many investors can transfer cost increases to their consumers.
The implication is that manufacturers and other investors are taking a big hit resulting from erosion of profit margins as a result of consumer resistance and weak purchasing power. Tackling inflation requires urgent government intervention to address the challenges inhibiting production, productivity and security in the economy. The real sector of the economy needs to be incentivised to reduce production costs. The government needs to offer concessionary import duty on intermediate products for industrialists. The effects of high energy cost and exchange rate on inflation is quite significant. It will be very difficult to tame inflation if we do not substantially fix power, logistics and forex and security issues. Regrettably, there are no quick fixes in these areas. But it is important to prioritise these issues and drive accelerated progress with the right strategies. Hopefully the proposed economic stabilisation measures embodied in a bill currently before the national assembly would substantially address these concerns from the fiscal side. Meanwhile, the sub nationals have critical roles to play in mitigating the challenge of food insecurity and food inflation. They are closer to the stakeholders in the agricultural and food value chain and better placed to impact agricultural productivity. The provision of rural roads by the states is also very critical to reduce transportation costs and ease access to markets.
NBS said Looking at the movement, the September 2024 Headline inflation rate showed an increase of 0.55% compared to the August 2024 Headline inflation rate. On a year-on-year basis, the Headline inflation rate was 5.98% points higher compared to the rate recorded in September 2023 (26.72%). This shows that the Headline inflation rate (year-on year basis) increased in September 2024 when compared to the same month in the preceding year (i.e., September 2023). Furthermore, on a month-on-month basis, the Headline inflation rate in September 2024 was 2.52%, which was 0.30% higher than the rate recorded in August 2024 (2.22%). This means that in September 2024, the rate of increase in the average price level is higher than the rate of in crease in the average price level in August 2024.
The percentage change in the average CPI for the twelve months ending September 2024 over the average of the previous twelve months period was 31.73%, showing 8.83% increase compared to 22.90% recorded in September 2023. On a year-on-year basis, in September 2024, the Urban inflation rate was 35.13%, this was 6.46% points higher compared to the 28.68% recorded in September 2023. On a month-on month basis, the Urban inflation rate was 2.67% in September 2024, this was 0.28% points higher compared to August 2024 (2.39%). The corresponding twelve-month average for the Urban inflation rate was 33.95% in September 2024. This was 9.84% points higher compared to the 24.10% reported in September 2023.
The Rural inflation rate in September 2024 was 30.49% on a year-on-year basis. This was 5.55% higher compared to the 24.94% recorded in September 2023. On a month-on-month basis, the Rural inflation rate in September 2024 was 2.39%, up by 0.33% points compared to August 2024 (2.06%). The corresponding twelve-month average for the Rural inflation rate in September 2024 was 29.76%. This was 7.97% higher compared to the 21.79% recorded in September 2023. The divisional level contribution MoM (%) Food & Non-Alcoholic Beverages 1.31 Housing, Water, Electricity. Gas & Other Fuel 0.42 Clothing & Footwear 0.19 Transport 0.16 Furnishings & Household Equipment & Maintenance 0.13 Education 0.10 Health 0.08 Miscellaneous Goods & Services 0.04 Restaurant & Hotels 0.03 Alcoholic Beverage, Tobacco & Kola 0.03 Recreation & Culture 0.02
