|By Adejumo Adekunle –
- Marginal 0.20% Increase Linked to Festive Demand
- Food Inflation Dips Slightly Despite Headline Surge
- Experts Predict Positive Inflation Outlook for 2025
Nigeria’s inflation rate climbed to 34.80% in December 2024, up from 34.60% in November, according to the latest Consumer Price Index (CPI) and inflation data released by the National Bureau of Statistics (NBS) on Wednesday.
The marginal 0.20% rise was attributed to increased consumer demand during the festive season. On a year-on-year basis, December’s inflation rate represents a significant jump of 5.87 percentage points from 28.92% in December 2023.
Key Drivers of Inflation
The persistent rise in inflation reflects escalating consumer prices, fueled by currency devaluation, elevated energy costs, and ongoing supply chain disruptions.
“Year-on-year, the headline inflation rate increased by 5.87% compared to December 2023 (28.92%),” NBS noted in its report.
However, there was a glimmer of relief as food inflation dropped slightly to 39.83% in December 2024, down from 39.93% in November.
CPPE’s Analysis and Recommendations
The Centre for the Promotion of Private Enterprise (CPPE) expressed concern over the unrelenting inflationary trend. Muda Yusuf, CPPE’s Chief Executive Officer, acknowledged the marginal rise in December’s inflation but maintained optimism for 2025.
“With the stabilization of exchange rates and an improvement in foreign reserves, inflation could see a positive trajectory in 2025,” Yusuf predicted.
He also highlighted potential benefits from reduced geopolitical tensions and the impact of the base effect given the high inflationary pressures of 2024.
Policy Concerns and Recommendations
CPPE cautioned against the National Assembly’s focus on aggressive revenue generation targets for ministries and agencies, citing inflationary risks.
“Excessive pressure on MDAs to boost revenue leads to higher fees, import duties, and regulatory charges, ultimately transferring costs to investors,” Yusuf explained.
To curb inflation, CPPE advised the following:
- Pause monetary policy tightening: Reduce interest rate hikes to lower business operating costs.
- Mitigate fiscal risks: Curtail the fiscal deficit and slow public debt growth.
“These measures will foster economic stability, ease inflationary pressures, and support investment growth,” CPPE stated.
Outlook for 2025
The think tank remains cautiously optimistic, pointing to key factors like exchange rate stability and geopolitical calm that could help steer the economy towards a more sustainable inflationary trend.
