Nigeria’s economy faces a formidable challenge as inflation surges to a 28-year high, reaching an unprecedented level in June 2024. The National Bureau of Statistics (NBS) has released data revealing a stark increase in both headline and food inflation rates, painting a grim picture of the country’s economic situation.
The headline inflation rate for June 2024 climbed to a staggering 34.19%, a significant jump from 22.79% in June 2023. This year-on-year increase of 11.40 percentage points underscores the severity of the economic strain. On a month-on-month basis, the inflation rate also rose, increasing by 0.17 percentage points from 2.14% in May 2024 to 2.31% in June 2024. The NBS explained that the headline inflation rate in June 2024 was 0.24 percentage points higher compared to the May 2024 rate.
The inflation dynamics in urban and rural areas show a varied picture. Urban inflation, on a year-on-year basis, reached 36.55% in June 2024, while the month-on-month urban inflation rate stood at 2.46%. In contrast, rural inflation was slightly lower, registering at 32.09% year-on-year and 2.17% month-on-month for June 2024. It’s worth noting that rural inflation in May 2024 was recorded at 31.82% year-on-year, a significant increase from 21.19% in May 2023, highlighting the broad economic impact across different regions of the country.
Food inflation has reached a critical level, posing a significant threat to household budgets. The food inflation rate for June 2024 was reported at a staggering 40.87% year-on-year, a sharp increase of 15.62 percentage points compared to 25.25% in June 2023. On a month-on-month basis, food inflation rose to 2.55% in June 2024, up from 2.28% in May 2024. The NBS attributed the rise in food inflation to the increased average prices of essential items such as groundnut oil, palm oil, water yam, cocoyam, cassava, and various fish types like catfish and croaker.
While some analysts suggest that Nigeria’s inflation may have reached its peak as the devaluation effects begin to wane, the current figures reflect a severe economic strain that requires immediate and effective intervention. The Nigerian Federal Government (FG) has implemented measures to combat the steep rise in prices, including removing tariffs and other charges on essential commodities like food and medicines to alleviate the growing hunger crisis. However, despite these efforts, Nigeria’s economy continues to struggle. The decline in oil prices, Nigeria’s primary export, coupled with a weak naira, has exacerbated the situation. The global pandemic further strained the economy, pushing inflation to new highs.
Looking back, in March 2021, Nigeria’s inflation rate was already high at over 18%, with food prices up by 22.9%. The current inflation figures reflect a continuing upward trend, with June 2024’s rates being the highest in nearly three decades. The NBS’s Consumer Price Index (CPI), which highlights the average change in prices of goods and services consumed daily, paints a bleak picture of the economic landscape, with substantial year-on-year and month-on-month increases. This situation demands urgent and decisive action to address the economic challenges facing Nigeria and mitigate the impact on its citizens.
