Please click to download our January 2024 Inflation Update

• According to recent Consumer Price Index (CPI) figures released by the National Bureau of Statistics (NBS), inflation has sustained its upward trajectory for the thirteenth consecutive month as of January 2024. The headline inflation rate increased by 98 bps to reach a new high of 29.90% y/y, compared to the previous reading of 28.92% y/y in December 2023. This marks a significant 808 bps increase from the January 2023 inflation rate of 21.82% y/y. Furthermore, the headline inflation also saw a monthly increase to 2.64%. 
• As mentioned earlier, increases in the prices of food continued to exert significant pressure on the heightened inflation figures. Specifically, the food index surged to another consecutive high, reaching 35.41% y/y in comparison to 33.93% y/y in December 2023. The report attributes the surge in food inflation to notable price increases in bread and cereals, potatoes, yam and other tubers, oil and fat, fish, Meat, fruit, coffee, tea, and cocoa.
• Following a similar pattern, core inflation rate rose to 23.59% y/y in January 2024, indicating a 53bps increase from the 23.06% y/y figure recorded in December 2023. Further insights from the report revealed that prices of passenger transport by road, medical services, actual and imputed rentals for housing, pharmaceutical products, accommodation services, and passenger transport by air experienced the most significant upswing in core inflation figures.

• Looking ahead, we anticipate that inflationary pressures will persist in their upward trajectory in the near to medium term. This trend is primarily driven by the ongoing devaluation of the naira, compounded by the country’s heavy reliance on imports, persistent security challenges in food-producing regions, and elevated energy prices.