The NBS report revealed that the November inflation rate was 6.4 percentage points higher than the 28.2% recorded in the same month last year. 

The month-on-month inflation rate for November also increased by 0.72%, further weakening the purchasing power of Nigerians already facing high costs of living.

Food inflation, a big component of the CPI, reached 39.93% on a year-on-year basis, up from 32.84% in November 2023. 

On a monthly basis, food inflation edged up to 2.98% from 2.94% in October 2024. The steep rise was driven by high prices of essential items such as rice, yam flour, millet, dried fish, goat meat, and powdered milk.

The report attributed the high inflation to supply chain disruptions, rising transportation costs, and the lingering effects of policy reforms. For many households, this has translated into a severe cost-of-living crisis, with basic necessities increasingly out of reach.

Economic analysts trace much of the inflation surge to policy decisions taken by President Bola Tinubu’s administration. 

Upon assuming office in May 2023, Tinubu removed the petrol subsidy and floated the naira, leading to a sharp increase in petrol prices—from under ₦200 per litre to over ₦1,100 in some regions—and a steep depreciation of the naira, which now trades at over ₦1,600 to the dollar.

While international financial institutions like the World Bank and IMF had long called for these reforms to stabilise Nigeria’s economy, the immediate fallout has been a spike in inflation and widespread hardship for citizens. 

The removal of subsidies, coupled with volatile exchange rates, has made energy, transportation, and imported goods considerably more expensive.

With inflation continuing its upward growth, experts warn of far-reaching implications for the nation’s economy and social stability. 

The cost of living has eroded disposable income and deepened poverty levels across Nigeria. Meanwhile, calls for the government to cushion the effects of its reforms through targeted social programmes and fiscal interventions have grown louder.

The inflation rate also brings a challenge to monetary authorities. The Central Bank of Nigeria (CBN) may face increasing pressure to tighten monetary policy, despite issues about the possible impact on borrowing costs and economic growth.

For millions of Nigerians, the hope is that policymakers will strike a balance between necessary reforms and measures that protect the most vulnerable populations.

This is a sustained rise in inflation for the second consecutive month, further tightening the financial stress on citizens already struggling with high living costs.

Food Prices and Transportation Costs Drive Inflation  

The surge in inflation partly results from transportation expenses and higher food prices. On a year-on-year basis, the October inflation rate was 6.55 percentage points higher than the 27.33% registered in the same month last year. 

Food inflation, a critical component of the CPI, reached 39.16%, representing a steep 7.64 percentage point rise compared to October 2023.

Month-on-month, food prices climbed by 2.94% in October, up from 2.64% in September, driven by rising costs of staples such as vegetable oils, meat products, and popular beverages like Lipton and Milo.  

Core Inflation Highlights  

Core inflation, which excludes volatile items like food and energy, stood at 28.37% year-on-year in October, reflecting an increase of 5.79 percentage points from the 22.58% recorded in October 2023. 

Items contributing significantly to this category included transportation services, rents, dining out, and personal grooming services. Month-on-month, the core inflation rate edged up slightly to 2.14% in October from 2.10% in September.  

Urban vs Rural Inflation  

Inflation dynamics varied across urban and rural areas. In urban regions, the inflation rate rose to 36.38% year-on-year in October, up from 29.29% a year earlier. Month-on-month, urban inflation climbed to 2.75%, slightly higher than September’s 2.67%. 

Rural inflation also experienced an uptick, reaching 31.59% year-on-year, compared to 25.58% in October 2023. Month-on-month, rural inflation was recorded at 2.53%, up from 2.39% in September.  

The rise in Nigeria’s inflation comes as ongoing economic reforms initiated by President Bola Tinubu’s administration are put in place.

Key policies, including the devaluation of the naira and the removal of fuel subsidies, were aimed at stabilising public finances and spurring economic growth but have inadvertently worsened inflationary pressures. 

While these measures initially led to a slowdown in inflation earlier this year, recent increases in fuel prices have reversed that trend, prolonging the cost-of-living crisis.

In response to these inflationary pressures, the Central Bank of Nigeria (CBN) has implemented five interest rate hikes this year in an attempt to curb inflation. 

The next Monetary Policy Committee meeting later this month is expected to further address these challenges, as the government tries to find a balance between fiscal reforms and economic stability.