Inflation Rises Marginally to 34.80% amid Higher Food, Energy, Commodity Prices

•Bauchi, Sokoto, Kebbi, others recorded highest increases 

•CPPE urges CBN to pause monetary tightening

James Emejo in Abuja and Dike Onwuamaeze in Lagos

The Consumer Price Index (CPI), which measures the rate of change in the prices of goods and commodities, increased to 34.80 percent in December 2024, compared to 34.60 percent in the preceding month.

The National Bureau of Statistics (NBS) revealed this yesterday.

The NBS attributed the 0.20 percent rise in the headline index to the December festive period which increased demand for goods and services.

According to the CPI report for December, year-on-year, inflation was 5.87 percent higher than the 28.92 percent recorded in December 2023.

Month-on-month, however, inflation stood at 2.44 percent in December compared to 2.64 percent in November.

“This means that in December 2024, the rate of increase in the average price level is slightly lower than the rate of increase in the average price level in November 2024,” the NBS stated.

Food inflation increased to 39.84 percent year-on-year in December compared to 33.93 percent in December 2023.

The rise in annual food inflation was attributed to increases in prices of yam, water yam, sweet potatoes, etc (potatoes, yam & other tubers class), beer, pinto (tobacco class) and guinea corn.

Other were maize grains, rice, (bread and cereals class), and dried fish-sadine, catfish dried, etc (fish class).

On a month-on-month basis, food inflation decreased by 0.32 percent to 2.66 percent compared to 2.98 percent in November.

The statistical agency attributed the decline to the rate of decrease in the average prices of local beer (burukutu), pinto (tobacco class), fruit juice in tin, malt drinks (soft drinks class), rice, millet, maize flour (bread and cereals class) and water yam, irish potatoes, coco yam (potatoes, yam and other tubers class).

However, the All items less farm produce and energy or core inflation, which excludes the prices of volatile agricultural produce and energy stood at 29.28 percent, year-on-year in December, up by 6.21 percent compared to the 23.06 percent in December 2023.

The increase in the core index was attributed to increases in prices of taxi journey per drop, bus journey intercity, journey by motorcycle (under passenger transport by road class), meals at local restaurants (accommodation service class), haircut service, women’s hairdressing, women hair brush (hairdressing salons and personal grooming establishments class).

Others were women’s hand bag, traveling bags (medium size), and suitcase (appliances, articles and products for personal care class).

Month-on-month, core Inflation stood at 2.24 percent in December 2024 compared to 1.83 percent in November.

The urban inflation stood at 37.29 percent, year on year, compared to 31 percent in December 2023.

Month-on-month, the index stood at 2.56 percent in December compared to 2.77 percent in the preceding month.

On the other hand, rural inflation stood at 32.47 percent year-on-year compared to 27.10 percent in December 2023.

Month-on-month, rural inflation dropped to 2.32 percent compared to 2.51 percent in November.

At the state level, year-on-year, the All Items inflation was highest in Bauchi (44.06 percent), Sokoto (42.43 percent), Kebbi (41.47 percent), while Katsina (28.33 percent), Delta (29.23 percent), and Imo (29.99 percent) recorded the lowest rise in headline index.

Month-on-Month, however, the highest increases were recorded in Kogi (5.40 percent), Cross River (4.38 percent), Sokoto (4.29 percent), while Yobe (-1.82 percent), Kano         (-0.57 percent), and Abuja (- 0.02 percent) recorded decline in prices.

Year-on-year, food inflation was highest in Sokoto (57.47 percent), Zamfara (46.39 percent), Edo (46.32 percent), while Ogun (34.24 percent), Rivers (35.43 percent), and Kwara (35.58 percent) recorded the slowest rise.

Month-on-Month, however, the food index was highest in Kogi (6.53 percent), Sokoto (6.21 percent), and Cross River (5.90 percent) while Yobe (-3.21 per cent), Kano (-1.29 per cent) and Abuja (-0.79 per cent) recorded decline in food inflation.

Reacting to the latest CPI figures, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stressed that inflationary pressures has continued to be a troubling feature of the Nigerian economy.

Yusuf said to ensure further moderation in inflationary pressures, the Central Bank of Nigeria (CBN) should put a pause on monetary policy tightening and interest rate hikes in order to reduce business operating costs.

He further recommended a reduction in fiscal risks to macroeconomic stability through a reduction in fiscal deficit and deceleration in growth of public debt.

Yusuf said: “CPPE is worried about the current  fixation of the National Assembly on revenue, especially the arbitrary revenue targets for  MDAs.

“Excessive pressure on MDAs to boost revenue and increase IGR has profound inflationary implications. 

“Reality is that such pressures are invariably transmitted to investors in form of higher fees, levies, penalties, import duties, regulatory charges etc.

“These outcomes are in conflict with government aspirations to boost investment, curb inflation and create jobs.”

He advised that revenue targets should be based on empirical studies, absorptive capacity of the economy and due  consideration of the wider economic implications.

He added that obsession with revenue would hurt investments, worsen inflationary pressures, aggravate poverty and impede economic growth.

“There should be a careful balance act between revenue growth aspirations, desire to boost investment and commitment  to  moderate inflation,” Yusuf said.