Nigeria’s economic landscape in December 2024 was marked by a persistent rise in inflation, reaching 34.80%, a slight uptick from November’s 34.60%. This marginal increase, attributed to heightened consumer demand during the festive season, signifies a broader trend of escalating living costs throughout the year. The December figure represents a substantial 5.87 percentage point jump compared to December 2023, underscoring the cumulative impact of economic pressures such as currency depreciation, inflated energy costs, and persistent supply chain disruptions. These factors have consistently driven up consumer prices, impacting both urban and rural populations. The average inflation rate for the entire year of 2024 settled at 33.24%, a significant increase from the 24.66% average recorded in 2023, painting a clear picture of the intensifying economic strain faced by Nigerian households.
A deeper dive into the components of inflation reveals that food and non-alcoholic beverages were the primary drivers, contributing 18.02% to the overall inflation rate. This reinforces the significant impact of rising food prices on household budgets. Essential services, encompassing housing, water, electricity, gas, and other fuels, constituted the second largest contributor at 5.82%. Transportation costs also played a notable role, adding 2.26% to the overall inflation figure. These combined pressures on food, housing, and transportation expenses represent a substantial burden on consumers, particularly those with limited disposable income. Smaller, yet still impactful, contributions came from health (1.05%) and communication (0.24%), highlighting the pervasive nature of inflationary pressures across various sectors of the economy.
The geographical distribution of inflation reveals a disparity between urban and rural areas. Urban inflation, at 37.29% year-on-year, surpassed rural inflation, which stood at 32.47%. This urban-rural gap reflects the potentially greater exposure of urban populations to price fluctuations in transportation, housing, and certain consumer goods. While both urban and rural areas experienced year-on-year increases, a slight month-on-month decline was observed in both categories. Urban inflation dipped to 2.56% from 2.77% in November, while rural inflation eased to 2.32% from 2.51%. This marginal monthly decrease, while offering a glimmer of respite, does not negate the overall upward trend in inflation and its impact on purchasing power.
Food inflation, a critical concern for many Nigerians, continued its upward trajectory, reaching 39.84% year-on-year in December 2024, a marked increase from 33.93% in December 2023. This surge was driven by price hikes in essential staples like yams, rice, maize, and dried fish, impacting the affordability of basic food items. Despite the year-on-year increase, a slight month-on-month decline to 2.66% from 2.98% in November offered some relief, attributed to price reductions in items like local beer, soft drinks, and tubers. This nuanced picture of food inflation highlights the volatility of food prices and their susceptibility to both seasonal factors and broader economic pressures.
Beyond food and energy, core inflation, which measures price changes excluding these volatile components, also surged, reaching 29.28% year-on-year in December, significantly higher than the 23.06% recorded in December 2023. This underscores the broad-based nature of inflationary pressures, affecting even non-essential goods and services. The NBS identified sharp price increases in transport fares, restaurant meals, and personal grooming services, indicating the widespread impact of inflation on various aspects of daily life. The month-on-month core inflation figure also climbed to 2.24% in December from 1.83% in November, further solidifying the persistent upward pressure on core prices.
A state-by-state analysis reveals regional variations in inflation rates. Bauchi recorded the highest year-on-year inflation at 44.06%, followed by Sokoto (42.43%) and Kebbi (41.47%). On the lower end, Katsina had the lowest inflation rate at 28.33%, followed by Delta and Imo. The variation in state-level inflation rates suggests the influence of local factors like supply chain dynamics, market conditions, and regional economic performance. Sokoto experienced the highest year-on-year food inflation at a staggering 57.47%, followed by Zamfara (46.39%) and Edo (46.32%). Conversely, Yobe, Kano, and Abuja recorded month-on-month declines in food inflation, suggesting regional variations in food price trends. These state-level disparities underscore the need for targeted interventions to address the specific challenges faced by different regions. The overall high inflation, coupled with the increased consumer spending typical of the festive season, paints a challenging economic picture for Nigerians, underscoring the urgent need for effective policy measures to mitigate the impact of rising living costs.
