Ahead of the release of the January inflation figure, the Economic Intelligence Unit of Access Bank Plc has projected a decline to 33.74 per cent year-on-year in January 2025, reflecting a 1.06 percentage point drop from December 2024.
Inflation, according to the National Bureau of Statistics (NBS) December 2024 Consumer Price Index (CPI) rose to 34.8 per cent, up from 34.6 per cent in November. Rising energy costs, higher food prices, and increased consumer spending during the holiday season drove the increase. On a month-on-month basis, inflation rose by 2.44 per cent in December, slightly moderating from the 2.64 per cent recorded in November.
Factors contributing to this expected decline include exchange rate stability, reduced import costs, and seasonal declines in fruit and vegetable prices. A marginal reduction in fuel prices is also anticipated to lower transportation and production costs, alleviating inflationary pressures.
Access Bank EIU reported that inflationary pressures remain a challenge in Nigeria, despite significant improvements in key economic indicators.
The latest report highlights progress in exchange rate stability, external reserves growth, and positive Gross Domestic Product (GDP) performance, driven by market-oriented policies of the Central Bank of Nigeria (CBN). However, rising consumer prices continue to strain households and businesses.
Food inflation, which constitutes over half of the CPI basket, eased slightly to 39.84 per cent in December from 39.93 per cent in November. However, supply shortages due to insecurity, rising agricultural input costs, and flooding in key farming regions continued to drive up food prices.
Additionally, high energy costs escalated transportation expenses, further diminishing household purchasing power. Core inflation, excluding volatile items such as food and energy, increased to 29.28 per cent in December from 28.75 per cent in November.
Although the CBN, in response, raised the Monetary Policy Rate (MPR) to 27.50 per cent in November 2024, underscoring its commitment to stabilising prices amid risks posed by the naira’s depreciation and increasing fuel costs. The sustained rise in inflation was a challenge, placing businesses under financial strain, with rising operational costs threatening profitability.
Despite persistent inflation, a slowdown in the rate of increase has been observed, supported by the naira’s recovery, which appreciated from ₦1,535.82 per US dollar at the end of 2024 to ₦1,478.22 by January 2025.
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