Nigeria’s headline inflation for February crossed the psychological 30% mark at 31.70% y/y, from 29.90% y/y in January, adding 1.80% in one month period (Bloomberg’s estimate: 31.30%). Monthly headline inflation jumped to 3% levels at 3.12% m/m, from 2.64% in January 2024 and highest since August 2023. Similarly, Food inflation increased to 37.92% y/y in February, from 35.41% y/y in January, while core inflation, which excludes food and energy items, hit 25.13% in February, from 23.59% in January, according to data released by the National Bureau of Statistics (NBS).

Summary of Nigeria’s Inflation report for February 2024:

  • On a monthly basis, the headline index grew by 3.12% in February (vs 2.64% in January).
  • The core index declined to 2.17% m/m in February vs. 2.24% m/m in January. Whereas, the food sub-index grew at 3.79% m/m compared to 3.21% m/m in January.
  • The urban inflation rate increased to 33.66% y/y (vs 31.95% y/y in January 2024).
  • The rural inflation rate was rose at 29.99% y/y (vs 28.10% y/y in January 2024).

Recently, the monetary authorities have embraced an aggressive contractionary approach in curbing inflation rate, particularly mopping up money in the system and attempting to significantly reduce spending. However, given the familiar drivers, especially high cost of petroleum products and high import cost substantially tied to exchange rate, the near-term hope for a stability in prices of goods and services seems farfetched. It is worthy to note though that the monthly core inflation declined to 2.17% from 2.24%, the first decline since October 2023 and second since June 2023.