Report projects new figure Nigeria’s headline inflation rate will drop to in December

• Afrinvest’s report projects Nigeria’s headline inflation rate will drop to 34.5 per cent in December 2024
• It said the projection is based on further recovery in the exchange rate
• Nigeria’s inflation has continued to soar, reaching a new 28-year high of 34.60 per cent in November

A report by Afrinvest Research projects that Nigeria’s headline inflation rate may drop by 25 basis points (bps) to 34.5 per cent in December 2024 from the 34.60 per cent recorded in November.

The report, released on Saturday, December 21, said the mild decline in the rate is due to the “high base year impact on the food inflation sub-basket and a further recovery in the exchange rate, with the naira expected to strengthen to below N1,600/$ levels.”

Afrinvest stated that the inflation rate increase in November was driven by food inflation, which rose by 77 basis points to 39.9 per cent year-on-year, the highest in five months.

Nigeria’s inflation rate continues to soar

The National Bureau of Statistics (NBS) reported that the headline inflation rate for November increased by 70 basis points year-on-year to 34.6 per cent, marking the highest rate in over two decades.

On a month-on-month basis, the headline inflation rate declined marginally to 2.638 per cent in November compared to 2.640 per cent in October 2024, bringing the year-to-date average monthly inflation to 2.5 per cent.

This is higher than the 1.8 per cent projection by the Federal Government, which implies an annualised inflation rate of 33.0 per cent, compared to the Federal Government’s target of 21.4 per cent.

Food inflation rose to 39.93 per cent in November 2024, up from 32.84 per cent in the same period in 2023.

Food inflation increased by 2.98 per cent on a month-on-month basis from 2.94 per cent recorded in October, attributed to increases in the prices of staple foods such as yam, rice, maize, and palm oil, as well as guinea corn, millet, and meat.

Poor harvests due to flooding that destroyed over 700,000 hectares of cropland in 31 states, coupled with persistent insecurity and weak mechanisation in the agricultural sector were other contributors to the increase in prices of food items.

Core inflation, which excludes food and energy prices, increased to 28.75 per cent in November 2024, compared to the 22.38 per cent recorded in November 2023, the highest in two decades.

On a month-on-month basis, core inflation slightly decreased to 1.83 per cent in November from the 2.14 per cent recorded in October.

For the full year, the headline inflation rate is expected to average 33.1 per cent, surpassing the Federal Government’s projection by 11.7 percentage points.

Timeline: 4 times Nigeria’s inflation rate hit 28-year high in 2024

Meanwhile, TheRadar reported that the National Bureau of Statistics (NBS) recently released the Consumer Price Index (CPI) report, which showed that Nigeria’s inflation rate increased by 0.72 per cent increase from October’s rate of 33.88 per cent to 34.60 per cent in November.

The November rate set a new record for the highest inflation rate in Nigeria in 28 years as TheRadar chronicled Nigeria’s inflation rate and highlighted the four times inflation will climb to such height in 2024.