The urban inflation rate for December 2023 soared to a staggering 31%, according to the latest data from the National Bureau of Statistics (NBS).
It is 2.08%-points higher than the overall inflation rate in Nigeria and marks a significant uptick of 8.98%-points compared to the 22.01% rate recorded in December 2022.
The urban population is grappling with a challenging economic environment as costs continue to surge. On a month-on-month basis, the Urban inflation rate for December 2023 climbed to 2.42%, reflecting a 0.19%-point increase from November 2023’s rate of 2.23%.
This inflationary pressure is especially burdensome for the approximately 42% of Nigerians living in urban areas who are already facing multifaceted challenges such as inadequate sanitation, limited access to healthcare, food insecurity, and housing woes.
Higher than rural inflation
The urban inflation is also higher than what was recorded in rural areas by 3.9%-points. In December 2023, rural inflation also witnessed an increase, reaching 27.10% on a year-on-year basis.
This is a significant jump of 6.32% from the 20.72% recorded in December 2022. On a month-on-month basis, rural inflation for December 2023 stood at 2.17%, showing a 0.18%-point uptick compared to November 2023’s rate of 1.99%.
The corresponding 12-month average for rural inflation in December 2023 reached 23.25%, highlighting a 4.91 %-point increase from the 18.34% recorded in December 2022.
More Insights
- KPMG, in its macroeconomic review for the first half of 2023, forecasted that Nigeria’s headline inflation would rise to 30% by December 2023. This anticipated increase is attributed to recent reforms, including the removal of fuel subsidies and the unification of the foreign exchange market.
- However, it’s noteworthy that while urban inflation surpassed KPMG’s projection, the overall inflation rate was tempered by the lower rate observed in rural areas.
- In December 2023, Nigeria’s inflation rate rose to 28.92%, up from 28.20% recorded in the previous month. This marks the 12th consecutive increase in the inflation rate since January 2023.
- Delving deeper into the numbers, the headline inflation rate for December 2023 experienced a significant rise of 0.72% points compared to November 2023, indicating a noticeable acceleration in inflation. Moreover, when compared to December 2022, which had a headline inflation rate of 21.34%, the year-on-year basis for December 2023 saw a substantial increase of 7.58% points, signifying a significant surge in inflation during the same month of the previous year.
- On a month-on-month basis, the headline inflation rate for December 2023 reached 2.29%, surpassing November 2023’s rate of 2.09% by 0.20%. This indicates that the average price level increased at a faster rate in December 2023 compared to the preceding month, November 2023.
- The urban inflation rate’s sharp rise to 31% in December 2023 paints a worrying picture for city-dwelling Nigerians who are already grappling with various socioeconomic challenges.
It will be good for the government of the country to help the youth