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Nigeria Inflation February 2024

Nigeria: Inflation comes in at highest level since April 1996 in February

Inflation came in at 31.7% in February, which was up from January’s 29.9%. February’s figure represented the highest inflation rate since April 1996 and came on the back of a sharp devaluation of the naira on 30 January. Looking at the details of the release, prices for food and transportation rose at quicker rates.

Annual average inflation rose to 26.2% in February (January: 25.3%). Meanwhile, core inflation rose to 24.7% in February, from January’s 23.4%.

Lastly, consumer prices increased 3.12% in February over the previous month, picking up from the 2.64% increase recorded in January. February’s figure marked the highest reading since August 2023.

Following the naira’s recent devaluation our panelists have upgraded their inflation forecasts for 2024, and now see inflation avearing above last year’s level. Further upwards revisions remain a possibility. Monetary policy and the strength of the naira are key factors to track.

Analysts at the EIU commented on the outlook:

“Given probable deficit monetisation, negative real short-term interest rates and a 45% currency devaluation in February, we forecast that average inflation will rise to 30.3% in 2024, from 24.7% in 2023. The 2024 average reflects the fact that petrol price increases in June 2023 will drop out of the year-on-year calculation from mid-2024, preventing the rate from being even higher. ”

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