*The Central Bank of Nigeria explains how the component drivers of the country鈥檚 headline inflation, increased food and non-food components of the Consumer Price Index recorded in its recent Economic Report Fourth Quarter 2024 contributed to the 鈥榚levated inflation鈥� in the Q4 last year

Gbenga Kayode | 绿帽献妻

The Central Bank of Nigeria (CBN) has explained how the component drivers of the country鈥檚 headline inflation made the inflationary trend to remain 鈥渆levated鈥� in the Fourth Quarter (Q4) of 2024.

绿帽献妻 reports the CBN, which disclosed this in the report titled, 鈥淐entral Bank of Nigeria Economic Report Fourth Quarter (Q4) 2024鈥�, released Sunday, March 30, 2025, said food and non-food components of the Consumer Price Index (CPI) basket contributed to the elevated inflation in Q4 last year.

As regards the headline inflation in the last quarter, the report affirmed that inflation remained elevated Q4 2024, just as both food and non-food components of the CPI basket increased.

The banking sector regulator also stated: 鈥淗eadline inflation rose to 34.80, on year-on-year basis from 32.70 percent in the preceding quarter, due to higher energy costs and exchange rate pass through.

鈥淥ther factors such as hoarding, insecurity and infrastructure challenges contributed to the continued uptick in headline inflation.

The Bank noted that inflation 鈥渞emained broadly distributed across the components of the Inflation Pervasiveness, and the CPI basket during the review period, as analytical evidence showed an increase in its pervasiveness.

The CBN further said: 鈥淪pecifically, 74.62 percent of items in the CPI basket exceeded the historical average of 14.60 percent (2010-2023), compared to 70.14 percent in the preceding quarter.鈥�

The Bankers鈥� Bank, in the report, however, noted that inflation momentum decelerated in the review period by 0.20

It said: 鈥淢omentum percentage point compared with 0.55 percentage point in the preceding quarter of 2024.

鈥淭he slower pace was on account of the sustained restrictive monetary policy stance of the Bank.鈥�

According to the Bank, Inflation Momentum is measured by taking the CPI for December end period of every year as the base period to calculate the year-to-date inflation.

The report stated: 鈥淭he annualised or inflation momentum is then gotten by dividing the year-to-date inflation of the current period by the figure that stands for each of the 12 months (e.g.: 1=January, 3=March, 9=September, or 11=November, etc).鈥�

The banking sector regulator said the core inflation (excluding farm produce and energy) as well inched up to 29.28 per cent, compared with 27.43 percent in Q3 2024.

It explained: 鈥淭he rise was on account of inflation expectation, high energy prices, as well as high costs of manufacturing inputs.

The CBN also stated the analysis of the core inflation indicated that fish and seafood contributed 4.22 percentage points (pp), followed by meat (3.60 pp), actual and input rentals for housing (3.58 pp), oil & fats (2.81 pp), and clothing & footwear (2.41 pp).

On mean and median measures 聽聽聽聽聽

The report indicated the disinflation inclination of the Bank contributed to a slower trimmed mean and median measures of inflation compared with the traditional core inflation measure in the review period.

The CBN stated: 鈥淭he core measure of underlying inflation was 7.19 percentage points higher than the trimmed mean measure (22.09%) and 7.45 percentage points above the trimmed median (21.83%).

鈥淭his showed that more items remained volatile in the period under review. Thus, oils & fats which rose by 38.25 per cent; fish (38.59%); passenger transport by road (42.48%); bread & cereals (43.51%); tobacco (43.71%); gas (43.88%); and potatoes, yam & other tubers (43.99%); were excluded from the upper band.鈥�

While telephone & telefax services (0.96%); telephone & telefax equipment (1.09%); motorcycles (4.03%); motor cars (5.00%); musical instrument (5.24%); water supply (5.61%); and photographic development (7.50%) were excluded from the lower band.

The Bank revealed the food inflation increased to 39.84 per cent (year-on-year), from 37.77 percent in the preceding quarter, driven by knock-on effects of higher transportation cost (as PMS price increased to an average of N1,065/litre from an average of N895/litre in Q32024).

鈥淥ther factors including festive-season-induced increase in demand, and hoarding activities by middlemen contributed to the uptick in food inflation during the review quarter,鈥� the report stated.

According to CBN, the contribution of both processed and the farm produce components of food inflation rose in the review period.

It explained while the contribution of processed food component rose to 18.36 pp from 17.16 pp in Q3 2024, the farm produce component rose to 21.48 pp from 20.61 pp.

Major components of food inflation

The Bank further said the key contributors to food inflation were meat, fish & egg (7.08 pp); rice (5.96 pp); yam, potatoes & other tubers (5.30 pp); garri (3.18 pp); and fruits & vegetables (3.06 pp).

The CBN said the Q4 2024 prices of most of the monitored domestic agricultural commodities increased in compared with the preceding quarter of the year.

The report stated: 鈥淭he price increases ranged from 2.11 per cent for beans (white) to 40.88 per cent for onion bulb.

鈥淭his development was primarily driven by the persistent increase in the costs of production and transportation, which was further exacerbated by higher energy prices.鈥�

The CBN, however, added that 鈥渢he prices of tomato decreased during the review period by 5.17 percent, largely on account of early harvest.鈥�

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