Nigeria’s general price level inched higher in March to 33.2%

National Bureau of Statistics has said that Nigeria’s headline inflation rate nudged higher to 33.2% y/y in March 2024 from 31.7% y/y in  the previous month. Compared to the same period in 2023, the headline index print represents an 11.2ppts increase in the general price level in the last twelve months (LTM) – a more than four-fold growth when compared to real output expansion in the economy (Real GDP grew by 2.7% in the LTM).
Nigeria’s inflation kept climbing in March, reaching a 28-year high of 33.20% in annual terms, driven by soaring food and energy costs despite central bank rate hikes aimed at halting its ascent.

The latest data from the National Bureau of Statistics marks the 15th month in a row that consumer inflation had risen. It was 31.70% in February. Inflation has not been this high in Africa’s largest economy and most populous nation since early 1996, leaving millions of people struggling to meet basic needs. The statistics office said food and non-alcoholic beverages were the biggest contributors to the pickup in inflation. Food inflation rose to 40.01% year-on-year, from 37.92% a month earlier. Price pressures have been spurred by reforms implemented by President Bola Tinubu in his first year in charge, chiefly ending a costly petrol subsidy and twice devaluing the Naira currency .

The government also recently increased electricity tariffs for consumers who use the most power as it seeks to wean the economy off subsidies that have weighed on public finances. Last week Tinubu’s government began distributing 42,000 tons of grains such as corn, sorghum and millet to help vulnerable households. The central bank has twice raised interest rates this year to try to get price pressures under control and expects inflation to moderate from May. Looking at the component members of the headline reading, the food inflation rate ascended to 40.0% y/y (February: 37.9%). On a m/m basis, the food inflation sub-index printed at 3.6%, reflecting a slower growth of 0.2ppts compared to the rate recorded in the prior month (3.8%). The modest decline in the m/m food print is linked to a combination of interventions at different levels of government (e.g, FG dolled out 42,000MT of grains across the federation while some states such as Lagos, subsidised the price of selected food items in major markets by about 25.0%). Likewise, the core inflation sub-component nudged higher by 6.3ppts to 25.9% y/y. On a m/m basis, the core inflation rate printed at 2.5%, up 0.4ppts from 2.2% in the prior month. This was driven by price increases in bus fares, rentals, medical fees, and pharmaceutical products.