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According to the National Bureau of Statistics (NBS) data, Nigerian inflation rose to a 21-year high of 28.92 per cent in December 2023. December’s inflation rate is a 0.72 percentage point increase from the 28.20 per cent that was recorded in November 2023. The previous was 28.2 per cent recorded in August 2005 and November 2023.
Members of the Orgnaised Private Sector (OPS) blamed naira depreciation, fuel subsidy removal, and insecurity, among others for the persistent rise in inflation. On a year-on-year basis, the headline inflation rate was 7.58 per cent points higher compared to the rate recorded in December 2022, which was 21.34 per cent. This shows that the headline inflation rate (year-on-year basis) increased in December 2023 when compared to the same month in the preceding year (i.e., December 2022).
Furthermore, on a month-on-month basis, the headline inflation rate in December 2023 was 2.29 per cent, which was 0.20 per cent higher than the rate recorded in November 2023 (2.09 per cent). This means that in December 2023, the rate of increase in the average price level is more than the rate of increase in the average price level in November 2023. Nigeria is facing its worst cost of living crisis with year-on-year inflation refusing to slow down in 2023. Inflation was 21.82 per cent in January.
While inflation didn’t hit 30 per cent as predicted by many experts it has been blamed for rising poverty rates in the county. Between January and May 2023, inflation pushed an estimated four million people into poverty in the country. Sluggish growth and rising inflation have increased poverty from 40 per cent in 2018 to 46 per cent in 2023, pushing an additional 24 million people below the national poverty line. The number of poor rose from 79 million in 2018 to 104 million in 2023, with urban poor—more exposed to inflation—increasing from 13 to 20 million, while the number of poor people in rural areas increased from 67 to 84 million.
The removal of fuel subsidy and a foreign exchange rate unification policy which has led to the steep depreciation in the value of the naira have been blamed for the surge in the country’s inflation. Nigeria’s economic growth is expected to be impacted by the surge in the inflation rate. Recently, the International Monetary Fund disclosed that the country’s inflation will slow economic growth.
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Reacting to the spike in inflation, the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the year-end inflation rate agreed with the chamber’s earlier prediction, particularly considering the economic reviews implemented by the Federal Government.
