According to the National Bureau of Statistics (NBS), Nigeria’s annual inflation rate increased to 33.20% in March from 31.70% in February. The bureau reported that the headline inflation rate for March 2024 rose by 1.50% compared to the previous month.
On a year-on-year basis, the headline inflation rate in March 2024 was 11.16% points higher than the rate recorded in March 2023, which was 22.04%. The NBS stated that the headline inflation rate (year-on-year basis) increased in March 2024 compared to the same month in the preceding year (March 2023).
On a month-on-month basis, the headline inflation rate in March 2024 was 3.02%, which was 0.10% lower than the rate recorded in February 2024 (3.12%). This indicates that the rate of increase in the average price level was less than the rate of increase in the average price level in February 2024.
The food inflation rate in March 2024 accelerated to 40.01% on a year-on-year basis, 15.56% points higher than the rate recorded in March 2023 (24.45%). Food prices have been increasing in Nigeria, with the situation worsening due to the impact of government policies such as the removal of petrol subsidies.
The upward trend in the prices of staples and other products has weakened the purchasing power of many citizens, making it challenging for many households to afford daily meals. Nigeria’s naira has also plunged to record lows across both the official and unofficial markets due to increased forex demand and surging prices of goods and services.
To address the lingering price distortions affecting the naira exchange rate in the forex markets, the Central Bank of Nigeria (CBN) sold $10,000 to each Bureau De Change operator at a rate of N1,101 per US dollar. This action led to the naira appreciating at the official market, trading at N1,142.38 to the dollar.
The NBS reported that the contributions of items on the divisional year-on-year level to the increase in the headline index are food & non-alcoholic beverages (17.20%), housing, water, electricity, gas & other fuel (5.56%), clothing & footwear (2.54%), and transport (2.16%). Other contributors include furnishings & household equipment & maintenance (1.67%), education (1.31%), health (1.00%), miscellaneous goods & services (0.55%), restaurant & hotels (0.40%), alcoholic beverage, tobacco & kola (0.36%), recreation & culture (0.23%), and communication (0.23%).
The percentage change in the average CPI for the twelve months ending March 2024 over the average of the CPI for the previous twelve-month period was 27.13%, showing a 6.76% increase compared to 20.37% recorded in March 2023.
