The National Bureau of Statistics (NBS) has released its December 2023 Consumer Price Index (CPI) and Inflation report, revealing that Nigeria’s headline inflation rate has surged to 28.92 percent. This represents a significant increase of 7.58 percentage points compared to the 21.34 percent recorded in December 2022, and a slight rise of 0.72 percentage points from the 28.20 percent recorded in November 2023. It is worth noting that the current inflation rate is 11.76 percentage points higher than the 2023 budget assumption of 17.16 percent.

Furthermore, the food inflation rate has also experienced a notable surge, reaching 33.93 percent in December 2023, compared to 23.75 percent in December 2022. This indicates a substantial increase of 10.18 percentage points. The persistent rise in inflation can be attributed to several factors, including the escalating cost of food, high transportation expenses, elevated energy prices, expensive imports, and the depreciation of the exchange rate. These factors not only erode the purchasing power of consumers but also contribute to a higher cost of living and potential economic consequences.

Despite the government’s declaration of a state of emergency in the food sector six months ago (July 13, 2023), food inflation and food insecurity continue to persist. It is crucial to prioritize enhancing agricultural resilience and security in order to boost food production and mitigate food inflation. Additionally, promoting domestic production through improved access to credit and infrastructure is necessary to address the issue of imported inflation resulting from high import costs.

In order to combat inflation and achieve macroeconomic stability, it is imperative to strengthen reform efforts by implementing a well-coordinated combination of monetary, fiscal, and foreign exchange policies. These measures will help lower inflation rates and foster a more stable economic environment.