Nigeria’s November inflation rate projected to reach 34.03%

• Nigeria’s inflation rate is projected to reach 34.03 per cent in November  
• CAPE Economic Research & Consulting also said food and core inflation will hit 40.13 per cent and 28.12 per cent, respectively
• It says fiscal deficit, fuel subsidy removal, and forex volatility are the biggest pressures

CAPE Economic Research & Consulting has projected that Nigeria’s headline inflation rate will reach 34.03 per cent in November 2024, ahead of the official release of November’s inflation data by the National Bureau of Statistics (NBS).

It said headline inflation will rise to 34.03 per cent, food inflation will reach 40.13 per cent, and core inflation will hit 28.12 per cent in the month.

In its latest publication, the firm said its forecast is predicated on the persistent increase in food prices, fluctuations in the exchange rate, housing, and utility costs, which contributed 4.70 per cent, 0.38 per cent, and 0.31 per cent, respectively, to the inflation rate in November.

CAPE stated, “Inflation is expected to heighten in November 2024. Our forecast showed that inflationary pressure would heighten as the headline, food and core inflation are expected to rise to 34.03, 40.13 and 28.12 per cent, respectively.

“The principal drivers shaping the forecast for headline inflation persist in food prices, the exchange rate, housing, and utility costs, contributing 4.70 per cent, 0.38 per cent, and 0.31 per cent, respectively.

“Our analysis underscores the significant influence of food prices, exchange rate fluctuations, and housing and utility costs on headline inflation.”

Fuel subsidy removal, forex volatility are biggest pressures

The firm further noted that fuel subsidy removal, which has led to fuel price increases, foreign exchange rate volatility as a result of naira floating, and expanded fiscal deficit, continues to exert pressure on inflation.

It added that core inflation remains largely driven by increases in transportation, education, clothing, housing, utilities, and healthcare costs.

CAPE stated, “Inflationary risks are further compounded by the expanding fiscal deficit, the removal of fuel subsidies, and sustained exchange rate pressures, all of which contribute to significant pass-through effects on consumer prices.”

Inflation rate reached 33.88 per cent in October

The NBS recently released the Consumer Price Index (CPI), which revealed that Nigeria’s inflation rate reached 33.88 per cent in October 2024.

The rate is a 1.18 per cent increase from the 32.7 per cent recorded in September 2024, attributed to high energy prices, currency depreciation, and supply chain disruptions, exacerbated by floods, infrastructural deficits, and insecurity, among others. 

Nigeria’s inflation rate soared from 22.4 per cent in May 2023 to a new 28-year all-time high of 34.19 per cent in June. After 19 months of increase, it decelerated to 33.40 per cent in July and declined further for the second consecutive month in August to 32.15 per cent.

Inflation: Nigerians to spend 54.9% income on food in next 6 months, projects CBN

Meanwhile, TheRadar reported that according to a recent survey by the Central Bank of Nigeria (CBN), the escalating inflation rate in Nigeria is expected to lead households to dedicate the largest portion of their earnings to food expenses over the next six months.

The survey, conducted from July 22 to 26, 2024, reveals that the inflation rate has surged to 33.40 per cent, with food inflation exceeding 40 per cent.