Nigeria’s Inflation Hits 28-Year High on Rising Food, Transport Costs
TLDR
- Nigeria’s annual inflation rate rose to 34.6% in November, its highest since March 1996, driven by surging food and transport prices
- This marks an increase from 33.9% in October, according to data from the National Bureau of Statistics
- Recent flooding in northern Nigeria that destroyed crops and higher gasoline prices contributed to the rise
Nigeria’s annual inflation rate rose to 34.6% in November, its highest since March 1996, driven by surging prices for corn, yam, and transport. This marks an increase from 33.9% in October, according to data from the National Bureau of Statistics.
Food inflation rose to 39.9% from 39.2%, while core inflation, which excludes volatile items like food and energy, climbed to 28.75% from 28.4%. Recent flooding in northern Nigeria that destroyed crops and higher gasoline prices contributed to the rise.
The central bank has increased its key interest rate by 875 basis points this year to curb inflation and support the naira, which has lost 41% of its value against the dollar. Governor Olayemi Cardoso expects inflation to begin easing in 2025 as monetary tightening takes effect. The government is also counting on deregulating the petroleum industry and improving security in food-producing regions to alleviate price pressures over time.
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Key Takeaways
Nigeria’s inflation surge underscores the economic challenges the nation faces, including currency depreciation, agricultural disruptions, and higher energy costs. These factors have significantly impacted consumer purchasing power, particularly in food-dependent households, as food inflation nears 40%. The central bank’s aggressive rate hikes aim to stabilize prices and the naira, but broader structural reforms remain critical. Deregulating the petroleum sector could help address supply bottlenecks while improving security in the northeastern food-producing regions is vital for reducing agricultural disruptions. Inflation's persistence also poses challenges for Nigeria's monetary policy, as rising prices may slow economic growth and amplify hardship for the population. Policymakers must balance short-term inflation controls with long-term measures to stabilize the currency and ensure sustainable development.
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