Inflation rises to 34.8% as festive period drives up demand

Nigeria’s inflation rate rose to 34.8 per cent in December from 34.6 per cent in November driven by festive period rise in demand for goods and service.

The National Bureau of Statistics, NBS, disclosed this in its December Consumer Price Index report, CPI.

The NBS said: In December 2024, the Headline inflation rate was 34.8 percent relative to the November 2024 headline inflation rate of 34.6 percent.

“Looking at the movement, the December 2024 Headline inflation rate showed a marginal increase of 0.20 percent compared to the November 2024 Headline inflation rate.

“This was due to the December festive period increases in demand for goods and services.

“On a year-on-year (YoY) basis, the Headline inflation rate was 5.87 percent higher than the rate recorded in December 2023 (28.92 percent). This shows that the Headline inflation rate (YoY basis) increased in December 2024 compared to the same month in the preceding year (i.e., December 2023).

“On the contrary, month-on-month (MoM) basis, the Headline inflation rate in December 2024 was 2.44 percent which was 0.20 percent lower than the rate recorded in November 2024 (2.64 percent).

“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.”

However, food inflation declined by 0.09 percentage point to 39.84 percent in December from 39.93 percent in November.

NBS said: “The Food inflation rate in December 2024 was 39.84 percent on a YoY basis, 5.91 percent points higher compared to the rate recorded in December 2023 (33.93 percent).

“The rise in Food Inflation on a YoY basis was caused by increases in prices of the following items; yam, water yam, sweet potatoes, etc (potatoes, yam & other tubers class), beer, pinto (Tobacco class), guinea corn, maize grains, rice, etc (Bread and Cereals class), and dried fish-sardine, catfish dried, etc (Fish class).

“On a month on month basis, the Food inflation rate in December 2024 was 2.66 percent which shows a 0.32 percent decrease compared to the rate recorded in November 2024 (2.98 percent).

“The decline can be attributed to the rate of decrease in the average prices of local beer (Burukutu), Pinto (Tobacco class), fruit juice in tin, malt drinks, etc (Soft Drinks class), rice, millet, maize flour, etc (Bread and Cereals class) and water yam, Irish potatoes, coco yam, etc (Potatoes, Yam & Other Tubers class).”

The bureau said that in December 2024, food inflation YoY 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 in Food inflation on YoY basis.

Commenting, analysts at Vetiva Capital Management Limited, projected that the  inflation rate will decline in January due to further moderation in food prices.

They said: “For January 2025, we expect YoY food inflation to slightly moderate due to support from carryover stock of food items from the main harvest season. However, core inflation is expected to remain elevated due to anticipated increases in energy prices. Overall, we project headline inflation to settle at 34.55% in January 2025.”

Also commenting on the development, Chief Executive Officer, Center for Promotion of Private Enterprise, CPPE, Mr. Muda Yusuf, called on the Central Bank of Nigeria, CBN to pause its monetary policy tightening measures to ensure a further moderation in inflationary pressures. He also called for reduction in fiscal spending by the Federal Government and deceleration in growth of public debt.