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| Headline CPI (YoY): The Headline CPI (YoY) for April stood at 33.69%. April 2024’s month-on-month headline inflation rate stands at 2.29% when compared to the February 2024 headline inflation rate. This marks the 16th consecutive month of increase. On a month-on-month basis, the headline inflation rate for April 2024 decreased slightly to 2.29%, down 0.73% from March 2024’s rate of 3.02%. Core CPI (YoY): The Core inflation, which excludes the prices of volatile agricultural produce and energy stood at 26.84% in April 2024 on a year-on-year basis, when compared to the 19.66% recorded in March 2023. Food Inflation: Food inflation, in particular, a major driver of inflation saw a significant surge, rising to 40.53% year-on-year from 24.61%. This increase was driven by higher prices for millet flour, Garri, Bread, wheat Flour prepacked, Semovita and other food items. However, the month-on-month food inflation rate in April 2024 decreased to 2.50%, showing a 1.11% drop from March 2024’s rate of 3.62%. |
 Source: Comercio Partners | NBS |
| Insight: Nigeria faces a persistent inflationary beast, a challenge that has stretched on for 16 consecutive months. While a glimmer of hope flickers with a slight month-on-month decrease, the decline remains modest. This could be interpreted as an initial response to the Central Bank of Nigeria’s (CBN) hawkish stance, characterized by aggressive interest rate hikes. However, the question lingers: Why does inflation persist despite the CBN’s efforts? The answer lies in a multi-faceted punch. The recent threefold surge in electricity tariffs and rising transportation costs continue to fuel price increases. The CBN, to its credit, has thrown heavy punches back. They’ve implemented a staggering 600 basis point hike in the Monetary Policy Rate (MPR) across two moves, reaching a record high of 24.75%, they also have significantly increased the cash reserve ratio for banks, effectively tightening liquidity. This aggressive stance aims to tame inflation. The reality, though, is that this fight is a brutal one. The upcoming Monetary Policy Committee meeting is highly likely to see another interest rate hike as the CBN strives to regain control. The upcoming meeting holds immense weight. Expectations point towards a further rise in the benchmark interest rate, a necessary step to combat the soaring inflation. The CBN Governor, in a recent interview, confirmed this hawkish approach, emphasizing that high interest rates will remain until inflation is subdued. In essence, Nigeria’s battle with inflation is far from over. The CBN’s actions are a step in the right direction, but the true test lies in their effectiveness in bringing down prices and stabilizing the economy. |
 Source: Comercio Partners | CBN | NBSThe graphical depiction illustrates a concerning trend wherein the inflation rate surpasses the Central Bank of Nigeria’s (CBN) Monetary Policy Rate (MPR), as evidenced by the steeper trajectory of the inflation trend line compared to the MPR. This suggests that the conventional approach of hiking interest rates has not effectively curbed Nigeria’s inflationary pressures. |
| Bottom Line Nigeria is in the throes of a brutal economic crisis, the likes of which haven’t been seen in nearly 30 years. Food and fuel prices are skyrocketing, the Naira is losing value rapidly, and foreign exchange markets are jittery. This perfect storm is squeezing the life out of Nigerian consumers, causing widespread frustration and anger. The Central Bank has been throwing punches, but inflation remains a formidable opponent. While their efforts are commendable, Nigeria’s inflation woes are deeply rooted in structural issues. To truly turn the tide, there is a need for a proactive and coordinated attack, which means fiscal policy needs to step into the ring. Monetary policy alone can’t win this fight. |
