Why Nigeria's inflation rate increased in September 2024

• Nigeria’s headline inflation has hit a new high in September following the increase in petrol prices
• Data from the National Bureau of Statistics released on Tuesday, October 15, 2024, shows that the inflation rate now stands at 32.75%
• Analysts have attributed the rise to the recently increased petrol prices by the NNPC in September

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Nigeria’s inflation rate has raced to a new high of 32.70% in September 2024, up from 32.15% recorded in August 2024.

The country’s consumer price index surged after a petrol price hike, a sharp reversal from the two-month decline in July and August 2024.

NBS reports hike in inflation rate due to petrol price increase Credit: PIUS EKPEI UTOMI
Source: Getty Images

Inflation rate accelerates in September

Inflation figures for September 2024 from the National Bureau of Statistics (NBS) show that the Consumer Price Index increased to 32.70% from 32.15% in the previous month.

The NBS report shows that the monthly inflation rate for September 2024 rose by 0.23% to 2.52%.

The NBS reported that Nigeria’s annual headline inflation declined in July for the first time in 19 months to 33.40% and 32.15% in August, causing the closest gap between the interest rate and inflation in 2024.

This development comes despite the Monetary Policy Committee’s 50 basis point hike in the interest rate to 27.25%, the fifth consecutive hike in 2024, to combat inflation.

NNPC’s petrol price hike to blame

In September 2024, the Nigerian National Petroleum Company Limited (NNPC) hiked petrol prices from N597.00 to N855 per litre and then again from N950 to N998 in Lagos and N1,003 in other parts.

The national state oil company increased petrol prices twice in September, leading to high prices of goods and services due to high transport costs.

The recent inflation figures show that food inflation, the arrowhead of inflation, increased to 37.7% in September from 30.64% in September 2023.

Core inflation rises as analysts predict more increases

Core inflation rose to 27.43% in the period under review from 21.84% recorded in September 2023.

Experts have projected that due to the total deregulation of the petroleum downstream oil sector, Nigerians will experience accelerated inflation in the coming months.

Justin Uche, economist and financial analyst at New Edge Financial Services Limited, disclosed that inflation is expected to ease around December 2024, when Nigerians would know the actual cost of petrol.

“We expect further increases in inflation rates as we expect that NNPC and marketers will hike petrol prices.That will continue until around December when petrol prices will stabilise, leading to an adjustment in the inflation rate also,” he said.

Data shows 10 Nigerian states with the cheapest, highest food prices

Legit.ng earlier reported that the NBS has said that Nigeria’s headline inflation rate dropped to 32.15% in August compared to the July record of 33.40%.

According to the NBS report, August headline inflation decreased by 1.25% compared to the July rate.

NBS says the headline inflation rate was 6.35% points higher yearly than the rate recorded in August 2023, which was 25.80%.

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Source: Legit.ng