Nigeria’s Inflation Rate Climbs to 34.8% in December

 

The National Bureau of Statistics (NBS) has reported a rise in Nigeria’s inflation rate to 34.8% in December 2024, up from 33.6% in November. This was revealed in the latest Consumer Price Index (CPI) report published on January 15, 2025.

 

Key Drivers of Inflation

 

• Transportation costs were identified as the main factor driving the increase.

• Food inflation slightly slowed to 39.8% from 39.9% in November.

• The core inflation rate, which excludes agricultural produce and energy, rose to 29.3% from 28.75%.

 

Prices increased by 2.4% on a month-to-month basis.

 

CPI Methodology Overhaul

 

The NBS is set to implement a revised methodology for calculating inflation, rebasing the CPI for the first time in 16 years and updating the basket of goods and services. These changes, with 2024 as the new reference year, are expected to moderate future inflation figures.

 

• Food weighting will decrease from 51.8% to 40.1%.

• Housing, energy, and electricity will shrink from 16.7% to 8.4%.

 

Central Bank Measures

 

Inflationary pressures prompted the Central Bank of Nigeria (CBN) to raise its benchmark interest rate by 875 basis points in 2024. Despite these challenges, CBN Governor Olayemi Cardoso predicted in November that price growth could ease in 2025.

 

The CBN’s next monetary policy decision is scheduled for February 18, 2025.