The National Bureau of Statistics (NBS), Nigeria’s official agency for providing data on economic and social statistics, has reported a decline in the country’s inflation rate to 32.15% in August 2024. This marks the second consecutive drop in inflation this year, signaling possible easing of the inflationary pressure that has affected citizens’ purchasing power.
National Bureau of Statistics (NBS)?
The NBS is the primary government agency responsible for collecting, analyzing, and disseminating statistical information on Nigeria’s economy. The data it provides plays a vital role in shaping government policies and giving insights into various sectors, including inflation, unemployment, and national productivity.
Consumer Price Index Report Breakdown
According to the NBS consumer price index (CPI) report, inflation dropped by 2.22% month-on-month in August 2024 compared to July 2024. The CPI measures the average change in prices paid by consumers for goods and services, making it a key indicator of economic stability.
Decline in Food Inflation
Food inflation, a significant part of the inflation index due to the high dependency on food imports and production volatility, also dropped to 37.52% in August. This decline was driven by reduced prices of food items such as maize, yams, and beverages, giving some respite to consumers.
Year-on-Year Headline Inflation Comparison
Despite the monthly decrease, the inflation rate in August 2024 was still 6.35% higher than it was in August 2023, when the rate stood at 25.80%. This indicates that although prices are rising at a slower pace, they remain significantly higher than the previous year’s levels.
Month-on-Month Inflation Analysis
The inflation rate on a month-on-month basis was 2.22% in August 2024, slightly lower than the 2.28% recorded in July. This indicates a marginal slowdown in price increases, which could reflect early effects of economic interventions to curb inflation.
Key Drivers of Food Price Inflation
The rise in food prices over the year can be attributed to increasing costs of staple items such as bread, maize grains, guinea corn, yams, potatoes, cassava, palm oil, and beverages like tea and coffee. These commodities are essential to everyday life in Nigeria and have a direct impact on inflation figures.
Monthly Food Inflation Moderates
On a monthly basis, food inflation slowed to 2.37% in August 2024, down from 2.47% in July. Items such as groundnut oil, milk, and yams saw reduced price increases, contributing to the overall decline in the food inflation rate.
Average Annual Food Inflation Rate
The average annual food inflation rate for the twelve months ending in August 2024 was 36.99%, a substantial increase of 11.98 percentage points from the rate recorded in August 2023. This highlights a continued upward trend in food prices over the long term.
State-by-State Food Inflation Insights
Sokoto (46.98%), Gombe (43.25%), and Yobe (43.21%) experienced the highest food inflation rates on a year-on-year basis, while Benue (32.33%), Rivers (33.01%), and Bayelsa (33.36%) had the lowest. This variation reflects the different economic dynamics and cost of living across Nigerian states.
Month-on-Month State Food Inflation
On a month-on-month basis, states such as Adamawa (5.46%), Kebbi (4.48%), and Borno (3.88%) recorded the highest increases in food prices. In contrast, Ogun (0.08%), Akwa Ibom (0.45%), and Sokoto (1.00%) experienced the slowest rises in food inflation.
Economic Outlook and Implications
The decline in inflation for the second consecutive month provides some optimism, but high inflation levels continue to challenge the Nigerian economy. Sustained efforts to reduce inflation further, particularly in essential sectors like food, will be crucial for long-term stability.
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