In May 2024, Nigeria experienced a rise in inflation rate, reaching 33.95%, as reported by the National Bureau of Statistics. This represents a 0.26% increase compared to the previous month’s inflation rate. On a year-on-year basis, the headline inflation rate in May 2024 was 11.54% higher than the rate recorded in May 2023, which was 22.41%.
This indicates a significant increase in inflation over the course of a year. However, when considering the month-on-month basis, the inflation rate in May 2024 was 2.14%, which was 0.15% lower than the rate in April 2024.
This suggests that the rate of increase in the average price level was slightly lower in May compared to the previous month.
The NBS report also highlighted that the food inflation rate in May 2024 was 40.66% on a year-on-year basis, showing a significant increase compared to May 2023.
This rise in food inflation was attributed to price increases in various food items such as Semovita, Oatflake, Yam flour prepackage, Garri, Bean, Irish Potatoes, Yam, Water Yam, Palm Oil, Vegetable Oil, Stockfish, Mudfish, Crayfish, Beef Head, Chicken-live, Pork Head, and Bush Meat. On a month-on-month basis, the food inflation rate in May 2024 decreased by 0.22% compared to April 2024, standing at 2.28%.
The decline in Food inflation on a Month-on-Month basis was due to a decrease in the rate of increase in the average prices of Palm Oil, Groundnut Oil (under Oil and Fats Class), Yam, Irish Potato, Cassava Tuber (under Potatoes, Yam & Other Tubers Class), Wine, Bournvita, Milo, Nescafe (under Coffee, Tea and Coco Class).
The average annual Food inflation rate for the twelve months ending May 2024 compared to the previous twelve-month average was 34.06%, marking a 10.41% increase from the average annual rate of change recorded in May 2023 (23.65%).
To combat the rising inflation, the Central Bank of Nigeria (CBN) raised the interest rate by 150 basis points from 24.75% to 26.25% during its Monetary Policy Committee meeting in May. The MPC decided to increase the Monetary Policy Rate (MPR) for the third consecutive time to address the country’s high inflation levels, which stood at 33.69% in April 2024.
