Nigeria’s Consumer Price Index Analysis – September 2024

The Consumer Price Index (CPI) for September 2024 shows that Nigeria’s inflation rate remains high. The headline inflation rate rose to 32.70%, marking an increase from the 32.15% recorded in August 2024. On a year-on-year basis, headline inflation is 5.98 percentage points higher compared to 26.72% in September 2023, indicating a significant acceleration in price levels across the country.

Urban and Rural Inflation Analysis

• Urban Inflation: The year-on-year urban inflation rate was 35.13%, which was 6.46 percentage points higher compared to September 2023 (28.68%). Month-on-month, urban inflation was 2.67% in September 2024, compared to 2.39% in August 2024.
• Rural Inflation: The rural inflation rate was 30.49% in September 2024, 5.55 percentage points higher than in September 2023 (24.94%). Month-on-month, rural inflation stood at 2.39%, an increase from 2.06% in August 2024.

These figures show a clear disparity between urban and rural inflation rates, with urban areas experiencing a faster increase in prices. This trend highlights the inflationary pressures concentrated in urban centers, possibly driven by higher living costs and demand.

Food Inflation in September 2024
The food inflation rate for September 2024 rose to 37.77% on a year-on-year basis, which is a 7.13 percentage point increase compared to 30.64% in September 2023. The rise in food inflation is largely driven by price increases in items such as:

• Guinea Corn, Rice, Maize Grains, Beans (Bread and Cereals Class)
• Yam, Water Yam, Cassava Tuber (Potatoes, Yam & Other Tubers Class)
• Beer (Local and Foreign) (Tobacco Class)
• Vegetable Oil, Palm Oil (Oil & Fats Class)

Month-on-month, the food inflation rate was 2.64% in September 2024, higher than the 2.37% recorded in August 2024. The increase is primarily attributed to price rises in cooking oils, meat, and dairy products.

Core Inflation (All Items Less Farm Produce and Energy)
Core inflation, excluding volatile agricultural products and energy prices, stood at 27.43% year-on-year in September 2024, up by 5.59 percentage points from 21.84% in September 2023. Month-on-month, core inflation recorded 2.10%, down from 2.27% in August 2024. The main contributors to core inflation included:

• Rentals for Housing
• Intercity Bus and Taxi Journeys (Passenger Transport by Road Class)
• Meals at Local Restaurants
• Medical Services (including consultation fees)

Divisional Contributions to Inflation
The division-wise contributions to the overall inflation are significant in understanding sector-specific inflationary pressures:

• Food & Non-Alcoholic Beverages: 16.94%
• Housing, Water, Electricity, Gas & Other Fuel: 5.47%
• Clothing & Footwear: 2.50%
• Transport: 2.13%

These contributions indicate that food remains the primary driver of inflation, followed by housing and utilities, highlighting the areas where most consumers feel the inflationary pressure.

State-Level Inflation Trends

• Highest Year-on-Year Inflation: Bauchi (44.83%), Sokoto (38.74%), and Jigawa (38.39%)
• Lowest Year-on-Year Inflation: Delta (26.35%), Benue (26.90%), and Katsina (27.71%)

Food Inflation by State

• Highest Food Inflation: Sokoto (50.47%), Gombe (44.09%), and Yobe (43.51%)
• Lowest Food Inflation: Kwara (32.45%), Rivers (32.80%), and Kogi (32.83%)

These differences indicate regional variations in price levels, possibly influenced by supply chain challenges, regional agricultural production, and demand factors.

Conclusion
The Consumer Price Index data for September 2024 underlines Nigeria’s ongoing battle with high inflation rates, driven primarily by food and housing costs. Regional disparities also highlight different inflationary pressures faced by states. Addressing food supply bottlenecks and improving urban infrastructure are vital to curbing these rising prices and improving overall economic stability.

Discussion
What are your thoughts on the inflation trends in Nigeria? How can the government and policymakers address these persistent inflationary pressures? Share your insights and join the conversation.