‘Untamed Rise!’ Nigeria’s Inflation Hits 34.8% in December, CPPE Urges Policy Shift

Nigeria’s inflation rate surged to 34.80 percent in December 2024 from 34.60 percent in November.

This is according to the latest Consumer Price Index and inflation data released on Wednesday by the National Bureau of Statistics, NBS.

While the country’s inflation continues to rise, the Centre for the Promotion of Private Enterprise, CPPE, has identified tips for its moderation.

The December inflation data showed that the country’s inflation further rose marginally by 0.20 percent due to heightened demand for goods and services during the festive season.

On a year-on-year basis, the December inflation rate marked a significant increase of 5.87 percentage points compared to 28.92 percent in December 2023.

The untamed rise in the Nigeria’s inflation highlights the upward trajectory in consumer prices, driven by economic challenges such as currency depreciation, high energy costs and persistent supply chain disruptions.

“On a year-on-year basis, the headline inflation rate was 5.87 percent higher than the rate recorded in December 2023 (28.92 percent). This shows that the headline inflation rate (on a year-on-year basis) increased in December 2024 compared to the same month in the preceding year (i.e., December 2023),”

NBS stated.

Meanwhile, NBS said Nigeria’s food inflation dropped marginally to 39.83 percent in December 2024 from 39.93 percent in November on a year-on-year basis.

CPPE reacts

Reacting, the Chief Executive Officer at the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the inflationary pressures continue to be a troubling feature of the Nigerian economy as reflected in December’s inflation rate.

“Though the increase in the December headline inflation was marginal at 0.2% compared with November inflation figures.”

However, Yusuf is optimistic that Nigeria’s inflation would have a positive outlook in 2025 due to moderation in exchange rate volatility and improvement in foreign reserves.

“Meanwhile, the inflation outlook for 2025 promises to be positive for the following reasons: Sustained moderation in exchange rate volatility and improvements in foreign reserves.

“Prospects of easing geopolitical tensions with the inception of the Trump presidency in a few days time.

“And a strong base effect, given the high inflationary pressures experienced in 2024,” he stated.

The economic think tank group, CPPE, also decried the current fixation of the National Assembly on revenue, especially the arbitrary revenue targets for ministries, departments, and agencies.

“Excessive pressure on MDAs to boost revenue and increase IGR has profound inflationary implications.

“The reality is that such pressures are invariably transmitted to investors in the form of higher fees, levies, penalties, import duties, regulatory charges, etc. These outcomes are in conflict with government aspirations to boost investment, curb inflation, and create jobs.

“Revenue targets should be based on empirical studies, absorptive capacity of the economy, and due consideration of the wider economic implications.

“Obsession with revenue would hurt investments, worsen inflationary pressures, aggravate poverty, and impede economic growth. There should be a careful balancing act between revenue growth aspirations, desire to boost investment, and commitment to moderate inflation,” CPPE stated.

How Nigeria’s inflation rate can drop – CPPE

CPPE highlighted that Nigeria’s inflation can moderate on pause of monetary tightening policy by the Central Bank of Nigeria, reducing fiscal risks.

“To ensure a further moderation in inflationary pressures, CPPE recommends as follows:

“Pause on monetary policy tightening and interest rate hikes by the CBN to reduce business operating costs.

“Reduction in fiscal risks to macroeconomic stability through a reduction in fiscal deficit and deceleration in growth of public debt,”

the CPPE stated.