Inflation Spiral Bringing Pressure on Policy Makers

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In October 2024, Nigeria’s inflation rate surged to 33.88%, up from 32.70% in September. This marked a significant year-on-year jump of 6.55 percentage points from October 2023’s 27.33%, underscoring mounting economic pressures on consumers and businesses across the nation.

The month-on-month inflation for October 2024 rose to 2.64%, marginally higher than September’s 2.52%. This slight uptick indicates persistent inflationary pressure, driven by multiple sectors. The average annual inflation rate over the past twelve months was 32.26%, reflecting an 8.82 percentage point increase compared to 23.44% recorded in October 2023.

A deeper look into the divisional contributions reveals that food and non-alcoholic beverages were the primary inflation drivers, contributing a significant 17.55% to the overall year-on-year increase. Key contributors to the inflation surge include:

Housing, Water, Electricity, Gas & Other Fuel: 5.67%
Clothing & Footwear: 2.59%
Transport: 2.20%
Furnishings & Household Equipment: 1.70%
Education and Health
These data points highlight that essentials such as food and housing are exerting the most pressure on consumers, amplifying the cost-of-living challenges.

Urban inflation outpaced rural, standing at 36.38% year-on-year, which was 7.09 percentage points higher than the 29.29% recorded in October 2023. On a month-to-month basis, urban inflation saw a rise of 2.75%, slightly above September’s rate of 2.67%.

Conversely, rural areas recorded an inflation rate of 31.59% year-on-year, up 6.01 percentage points from 25.58% in October 2023. The month-on-month rural rate rose to 2.53%, showing a consistent increase from September’s 2.39%.

Food inflation climbed to 39.16% year-on-year, a sharp increase of 7.64 percentage points from the 31.52% recorded in October 2023. The price hikes were most pronounced in:

Staples: Rice, maize, and other cereals
Tubers: Yam, cocoyam, and water yam
Oils & Fats: Palm oil and vegetable oil
Beverages: Products like Milo, Lipton, and other popular drinks
On a month-to-month basis, food inflation rose to 2.94%, driven by increases in basic commodities like palm oil, dried meats, fish, and staple flours.

The states experiencing the highest year-on-year inflation were:

Bauchi: 46.68%
Kebbi: 40.02%
Sokoto: 39.65%
Meanwhile, Delta (27.85%), Benue (28.22%), and Katsina (29.59%) reported the lowest year-on-year inflation rates. For month-to-month changes, Kano led with a 3.77% increase, while Kwara saw the smallest rise at 1.27%.

The October 2024 inflation figures reflect the substantial economic strain facing Nigerians, as rising prices for basic necessities erode household purchasing power. With food and housing costs leading the surge. This development has brought pressure on policymakers on the need for them to implement measures that could stabilise prices and provide relief to consumers. The data underscores the need for strategic interventions to mitigate inflationary effects and support economic resilience as the year 2025 gets close.