Data from the International Monetary Fund (IMF) shows that Nigeria’s December 2024 inflation rate, at 34.80%, was the highest recorded among the ten largest economies in Africa over the past year.
Nigeria is also the only country on the list with an inflation rate exceeding 30 per cent and one of the two economies that witnessed an upward movement in inflationary pressures within the referenced period. Similarly, Angola saw a significant jump in its inflation rates from 18.19% in December 2023 to 28.41% in December 2024.
According to figures released yesterday by Nigeria’s statistics bureau, both headline inflation and food inflation rose by 5.87% and 5.91% respectively, year-on-year.
In contrast, South Africa, the continent’s second-largest economy, reported a notable decline in its inflation rates from 5.5% to 2.8% during the period analysed. Additionally, Egypt, which faced one of the highest inflation rates in 2023 at 34.6%, reduced it to 25.5%.
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Other notable decreases were seen in Algeria, Ethiopia, Morocco, Kenya, and Tanzania, with Morocco achieving an impressive drop from 4.3% to just 0.7%. Even Nigeria’s West African economic counterpart, Ghana managed to lower its inflation from 26.4% to 23% over the past year.
Analysts and economic watchers have linked the persistent rise in the prices of goods and services in Africa’s largest economy to its volatile exchange rate, high energy costs, and constant supply chain disruptions.
In 2024 alone, the naira fell by approximately 62% in the official market from ₦950/$1 in January to ₦1,535/$1, driving higher importation costs and further complicating operational expenditure for local establishments. Soaring energy costs and the effects of the petrol subsidy removal also placed additional strain on Nigerian households and businesses.
In an effort to tame the rising inflation, the Central Bank of Nigeria implemented six consecutive interest rate hikes last year, stating that the impact of these measures will take 6 to 9 months to materialise.
As the country’s inflationary pressures continue to erode disposable incomes and raise production costs, there are growing concerns about its impact on household purchasing power and business stability.
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