Nigeria’s headline inflation rate surged to 33.69% in April 2024, a 0.49% increase from March 2024’s rate of 33.20%, according to the latest data from the Nigerian Bureau of Statistics (NBS). 

This record rise in the inflation rate, which underscores the persistent economic challenges facing the nation, has dashed the hope of millions of Nigerians expecting a drop in the cost of goods and services.

On a year-on-year basis, the headline inflation rate in April 2024 was markedly higher, showing an increase of 11.47 percentage points from the 22.22% recorded in April 2023. This sharp rise highlights the escalating cost of living and the impact of various economic factors over the past year.

While the year-on-year inflation showed a steep rise, the month-on-month headline inflation rate in April 2024 was 2.29%, a decrease of 0.73% from the 3.02% recorded in March 2024. This indicates a slowdown in the rate of price increases compared to the previous month.

The NBS report also noted, “The percentage change in the average Consumer Price Index (CPI) for the twelve months ending April 2024 over the average of the CPI for the previous twelve-month period was 28.10%, reflecting a 7.28% increase compared to 20.82% recorded in April 2023.”

Urban and Rural Inflation

Urban areas experienced a sharper increase in inflation. In April 2024, the urban inflation rate stood at 36.00%, a 12.61 percentage point increase from 23.39% in April 2023. On a month-on-month basis, urban inflation was 2.67%, slightly lower than March 2024’s 3.17%. The twelve-month average for urban inflation was 30.02% in April 2024, compared to 21.50% in April 2023.

Rural areas also saw significant inflationary pressures. The rural inflation rate in April 2024 was 31.64% on a year-on-year basis, up by 10.50 percentage points from 21.14% in April 2023. Month-on-month, the rural inflation rate decreased to 1.92% in April 2024 from 2.87% in March 2024. The twelve-month average for rural inflation was 26.38%, compared to 20.18% in April 2023.

Food Inflation

Food prices continued to drive inflation. The food inflation rate in April 2024 reached 40.53% year-on-year, significantly higher than the 24.61% recorded in April 2023. The NBS said the increase was driven by rising prices of essential items such as millet flour, garri, bread, wheat flour, yam, cocoyam, various oils, dried fish, beef, and several fruits and beverages.

On a month-on-month basis, food inflation in April 2024 was 2.50%, a decrease from the 3.62% recorded in March 2024. The NBS attributed the monthly decline to slower increases in prices for items like yam, potatoes, beer, and various beverages and oils.

The average annual food inflation rate for the twelve months ending April 2024 was 32.74%, a 9.52 percentage point increase from the 23.22% recorded in April 2023.

Core Inflation

Excluding volatile agricultural products and energy, core inflation stood at 26.84% year-on-year in April 2024, up by 6.87 percentage points from 19.96% in April 2023. Significant price increases were observed in housing rentals, urban transportation, and medical services. On a month-on-month basis, core inflation was 2.20% in April 2024, down from 2.54% in March 2024. The twelve-month average core inflation rate was 22.84%, compared to 17.70% in April 2023.

Regional Inflation Variations

Inflation rates varied significantly across different states. Kogi recorded the highest year-on-year inflation rate at 40.84%, followed by Bauchi (39.91%) and Oyo (38.37%). Borno (26.09%), Benue (27.53%), and Taraba (28.69%) had the lowest year-on-year inflation rates. Month-on-month, Lagos experienced the highest increase at 4.52%, while Kano (0.30%), Ebonyi (0.97%), and Adamawa (1.25%) saw the slowest rises.

Food inflation also showed regional disparities. Kogi had the highest year-on-year food inflation rate at 48.62%, with Kwara (46.73%) and Ondo (45.87%) following. Adamawa (33.61%), Bauchi (33.85%), and Nasarawa (34.03%) had the lowest rates. On a month-on-month basis, Lagos led with a 4.74% increase, while Kano (0.47%), Adamawa (0.98%), and Zamfara (1.50%) had the slowest rises.

The rising inflation rates in Nigeria reflect ongoing economic challenges, including food supply disruptions and increased costs of living. With the rates making life unaffordable for most Nigerians, policymakers face the pressing task of addressing these inflationary pressures to stabilize the economy and mitigate the impact on citizens. 

The significant variations in inflation rates across regions also highlight the need for targeted measures to address local economic conditions, especially food production and the high cost of transportation. 

Earlier this month, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, identified the government’s large-scale purchases of food items for distribution as palliatives to vulnerable citizens as a contributor to the soaring food inflation in the country.

Another evolution as the Nigerian government plans to utilize N20 trillion from pension funds for infrastructure development: “Critics, including Atiku Abubakar, raised concerns about the legality and potential risks to retirees’ savings, while Finance Minister Wale Edun defended the plan as a means to unlock funds for development. The move sparked a debate on balancing economic growth with the security of pension funds.”

Let me add my voice as we did when the last administration wanted to go after the same funds. First, the Nigerian government has no exogenous  or endogenous capacity to return this fund back to pensioners if it is allowed to use it. The Pension fund does not belong to the government, and public pension managers cannot listen to the government on their investment thesis. 

Unless we can see the data which shows that giving this special vault to the federal government over other investment asset classes is superior on returns, safety,  and other indicators, we condemn this move. The government should just forget this fund and look for other alternatives.

I call the federal government to pause this initiative because it is anti-people and Nigerians do not support it. For years, the pension funds have been buying federal government securities; let it just end there. But going at this scale, to fund infrastructure, will be terrible. 

The pension managers should resist such pressures and stand for workers. If the government needs funds to fund infrastructures, it should do what other countries do: improve rule of law and make Nigeria safer for infrastructure investments. If you do those, private companies will take over these infrastructure burdens. 

In America, companies own train lines, bridges, etc, because there are strong property rights. Nigeria should make such possible, and not where you get a building permit, and you build, then in ten years, another government will come and tear down the same building even though a previous one gave you a permit to build. Who will invest in infrastructure when you see how some state governments are bulldozing properties left and right? 

If Nigeria focuses on fixing those matters, private funds will come to build our infrastructures since it is clear the government has no kobo.

President Bola Ahmed Tinubu virtually commissioned three major gas infrastructure projects on May 15, 2024, aimed at boosting economic growth and promoting the use of Compressed Natural Gas (CNG). The projects include the Anoh Gas Processing Plant, Anoh – OB3 Gas Pipeline Project, and the AHL Gas Processing Plant 2. The government has mandated the use of CNG vehicles by its officials and is encouraging the establishment of CNG refueling units across the country. Additionally, the Federal Executive Council approved an initiative to transform Nigeria’s infrastructure and housing sector through private partnerships, and the government is eyeing N20 trillion from the pension fund for infrastructure development.