A large proportion of Nigerian households believe the Nigeria’s inflation rate is high.
This finding was revealed by he Central Bank of Nigeria’s (CBN) Inflation Expectations Report for December 2024.
The report also revealed that 80.6 per cent of businesses perceive inflation to be at an elevated level, reflecting the persistent economic pressures faced by consumers and enterprises alike.
The findings highlight growing concerns over the rising cost of living and doing business in Nigeria.
The National Bureau of Statistics (NBS) reports that the headline inflation rate in Nigeria reached 34.80 per cent in December 2024.
The survey indicates that perceptions of inflation vary across different business sizes. According to the report, 83.6 per cent of large businesses believe inflation is high, 75.6 per cent of medium-sized businesses share the same sentiment while 83.9 per cent of small businesses also perceive inflation to be at an elevated level.
Among these, small businesses recorded the highest perception of inflation, emphasizing the disproportionate impact of rising prices on SMEs, which form the backbone of Nigeria’s economy.
The report also sheds light on how inflation is perceived across various income brackets. Notably, 88.2 per cent of households earning between N150,001 and N200,000 per month believe that inflation is high.
This demonstrates the strain on middle-income earners, who are increasingly finding it difficult to afford essential goods and services due to soaring prices.
Lower-income households are even more vulnerable to inflationary pressures, as food and transportation costs make up a significant portion of their expenses.
The widespread perception of high inflation aligns with Nigeria’s persistent inflationary trends. The inflation rate has been driven by several key factors. Staple food items have seen sharp price increases due to supply chain disruptions, insecurity in food-producing regions, and foreign exchange volatility. Food inflation is about 40 per cent. Average food prices have surged by 91.6 per cent between December 2023 to December 2024 according to NBS.
The continued increase in petrol and diesel prices, along with electricity tariff hikes, has significantly affected household and business expenses. The price of Liquified Petroleum Gas (cooking gas) rose by 44.62 per cent from December 2023 to December 2024 according to NBS.
The depreciation of the naira has led to increased costs for imported goods and raw materials, further fueling inflationary pressures.
Recent fiscal and monetary policies, including subsidy removals and tax reforms, have contributed to the inflationary environment.