Nigeria inflation soars again but shows sign of slowdown

Nigeria’s inflation rate hit a multi-decade high of 33.20 percent in March when measured from a year ago, but recorded its first fall in six months when measured month-on-month.

Annual consumer prices rose 1.5 percent points from 31.70 percent in February, the National Bureau of Statistics said Monday. It is the highest rate since 1996.

Nigerians have grappled with high inflation driven by a steep fall in the naira and the government’s removal of a fuel subsidy.

In a sign price may soon begin to cool after the Central Bank of Nigeria raised interest rates by huge margins twice in the last two months and forced down the exchange rate of the naira, the monthly inflation rate dropped for the first time since October.

Monthly inflation stood at 3.02 percent in March, compared to 3.12 percent a month earlier.

CBN governor Olayemi Cardoso has said the bank expects prices to begin to moderate from May.

By the numbers:

• The latest report shows that core inflation, which excludes food and fuel prices, rose to 25.90 percent in March 2024, up from 19.63 percent recorded in March 2023.
• Food inflation rate was 40.01 percent on a year-on-year basis, compared to 37.92 percent a month earlier.
• Highest increases were recorded in prices of food and non-alcoholic beverages, housing, water, electricity, gas and other fuel.

Why this matters:

The latest inflation numbers show that prices for everyday items Nigerians rely on are still going up, although things may soon change. This means the squeeze on your wallet is likely to get worse before it gets better.

• Cost of Living Crisis Deepens: Imagine needing more naira for the same groceries, transportation, and bills you pay every month. That’s the reality of high inflation, and it makes it harder for everyday Nigerians to make ends meet.
• Higher Interest Rates on the Horizon: To fight inflation, the central bank might raise interest rates even further than the recent increase. This could make it more expensive to borrow money, impacting things like loans for businesses and homes.