Nigeria’s inflation rate surged to a 28-year high in November, with consumer prices rising to 34.6% from 33.9% in October, driven by higher gasoline prices and rising food costs. This marks the third consecutive month of accelerating inflation, according to data from the National Bureau of Statistics.
The Central Bank of Nigeria (CBN) is now expected to continue its aggressive interest rate hikes into 2025 to combat inflation and stabilize the naira, which has lost 41% of its value against the US dollar this year. The bank has already raised its key interest rate by 875 basis points in 2024, and economists predict further hikes until inflation starts easing, possibly by the third quarter of 2025.
Food inflation hit 39.9% in November, up from 39.2% in October, due to floods in northern Nigeria that have affected key crops like yam and corn. Rising gasoline prices and core inflation, which excludes volatile food and energy prices, also contributed to the inflation spike.
CBN Governor Olayemi Cardoso has stated that inflation is expected to ease by 2025, aided by recent measures like the deregulation of the petroleum industry and efforts to improve security in the northeastern region, a key agricultural zone.
The central bank’s rate hikes will likely lead to higher borrowing costs for businesses, raising production costs for goods and services in Nigeria. This could result in higher prices for everyday items, from food to fuel, further squeezing household budgets.
As Nigeria’s inflation continues to rise, Ghana, which imports several products from Nigeria, including foodstuffs and manufactured goods, could experience an increase in the cost of these imports.
Despite these challenges, Nigeria remains committed to restoring price stability and stabilizing the naira, which could provide some relief to both local consumers and regional trading partners like Ghana in the longer term.
