Nigeria is currently facing an alarming surge in food inflation, which has escalated to a staggering 32.84% as of November. The National Bureau of Statistics’ latest report reveals a grim picture of the economic situation, with headline inflation also reaching a peak of 28.20%, up from 27.33% in October.
This increase in food prices has hit hardest in states like Kogi, Kwara, and Rivers, where food inflation rates have soared to 41.29%, 40.72%, and 40.22% respectively. Compared to last year’s statistics in November 2022, which stood at 24.13%, the current rate marks a significant and concerning increase.
Several essential food items, including bread, cereals, oils, fats, tubers, fish, fruits, meats, vegetables, and beverages like coffee and tea, have seen a notable rise in prices. The month-on-month food inflation rate in November 2023 was 2.42%, a considerable increase from October’s rate of 1.91%.
Interestingly, despite these high rates, food was relatively less expensive in states like Bauchi, Borno, and Jigawa, with inflation rates of 26.14%, 27.34%, and 27.63%, respectively.
This situation marks an 18-year high in Nigeria’s inflation, challenging the Central Bank of Nigeria’s (CBN) recent claims of a slowdown in month-on-month inflation rates. Contrary to the CBN’s assertion of decelerating prices due to monetary market reforms and FX market stability, the reality reflects a different scenario.
The removal of fuel subsidies and the unification of foreign exchange rates have been identified as key contributors to this inflationary trend. The World Bank’s December report pointed out that petrol prices have risen by an average of 163% since May, with the naira depreciating significantly against the US dollar in both official and parallel markets. These factors have contributed to the general increase in prices, particularly of gasoline and imported goods.
The impact of this inflation is profoundly felt by the poor and vulnerable populations in Nigeria. While the government has initiated targeted cash transfers to alleviate some of the burdens, the World Bank emphasizes the need for a more holistic approach, including tighter fiscal and monetary policies, to combat inflation effectively.
Moreover, Nigeria’s poverty rate has seen a disheartening increase from 40% in 2018 to 46% in 2023, adding approximately 24 million more people below the national poverty line. The World Bank, however, projects a potential decrease in poverty rates to 44% by 2026 if the current reforms lead to higher growth and lower inflation.
In the face of these challenges, the CBN Governor, Olayemi Cardoso, has indicated a renewed focus on tackling inflation and stabilizing prices, a move that is much anticipated by the nation in these trying economic times.
