ECONOMY

Glimmer of good news for Nigeria’s consumers as inflation slows

By our African Marketing Confederation News Team | 2024

Bureau of Statistics figures for July show a slight easing of inflation. But high food prices mean ordinary people remain under pressure.

Nigeria’s embattled consumers and consumer-facing businesses, struggling with a range of economic challenges including extremely high inflation, have had a glimmer of positive news with the announcement that inflation slowed for the first time in almost two years.

According to National Bureau of Statistics data for July, Nigeria’s headline inflation rate eased slightly to 33.4%. This is a slight reduction in the 34.19% figure for June 2024.

Nevertheless, consumers continue to be under huge pressure. “Food inflation, which accounts for the bulk of Nigeria’s inflation basket, slowed down to 39.5%, compared to June’s reading of 40.8%,” reports the website Trading Economics.

Nigerians remain under economic pressure. Photo: Uncle Bash007, Wikimedia Commons

“Additional downward pressure came from prices of housing and utilities (29.4% vs 30.3% in June 2024), transportation (25.2% vs 25.6%) and education (16.9% vs 17.2%).”

The administration of President Bola Tinubu has introduced a range of measures aimed at controlling rising prices. Among these is the suspension of import taxes on essential goods such as cowpeas, maize, rice and wheat.

In April this year, there was a salary increase of 25%-35% for workers, and the government reactivated a direct social transfer programme to support highly vulnerable families.

Nigeria’s inflation surged again in mid-2023

Nigeria has been battling high inflation for years, but this surged in mid-2023 when the government announced the removal of fuel subsidies.

According to a BBC report, Nigeria is currently experiencing its worst economic crisis in a generation, leading to widespread hardship and anger.

Apart from high inflation, there is foreign exchange rate volatility, low productivity, weak governance and poor infrastructure.

The current economic situation contrasts with the early 2000s, when the country was on a more positive development trajectory.

“Between 2000 and 2014, Nigeria’s economy experienced broad-based and sustained growth of over 7% annually on average, benefitting from favourable global conditions, and macro-economic and first-stage structural reforms,” the World Bank says in its Nigeria Overview.

“From 2015-2022, however, growth rates decreased and GDP per capita flattened, driven by monetary and exchange rate policy distortions, increasing fiscal deficits due to lower oil production and a costly fuel subsidy programme, increased trade protectionism, and external shocks such as the Covid-19 pandemic.”

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