The National Bureau of Statistics (NBS), in its Consumer Price Index (CPI) and Inflation report for December 2023, revealed that Nigeria’s headline inflation rate rose to 28.92 percent.
Compared to December 2022, the figure is 7.58 percentage points higher compared to the 21.34 percent recorded in December 2022 and 0.72 percentage points higher than the 28.20 percent recorded in November 2023. The inflation rate is 11.76 percentage points higher than the 2023 budget assumption of 17.16 percent.
The food inflation rate rose to 33.93 percent from 23.75 percent in December 2022, representing 10.18 percentage points increase. The persistent rise in Nigeria’s inflation rate is due to several factors, including the rising cost of food, high transportation costs, high energy prices, high import costs, and exchange rate depreciation.
These factors erode the purchasing power of consumers, increase the cost of living, and can have broader economic implications. While the government declared a state of emergency in the food sector 6 months ago (July 13, 2023), food inflation and food insecurity have persisted. Improving agricultural resilience and security is vital in increasing food production and curtailing food inflation.
Also, domestic production should be encouraged through credit access and infrastructure to address the issue of imported inflation given the high import costs from import of commodities.
Enhancing reform efforts with a carefully coordinated combination of monetary, fiscal, and foreign exchange policies should be the top objective to lower inflation and achieve macroeconomic stability.
cseaafrica.org
