Nigeria’s economic woes have intensified as the country grapples with its worst cost-of-living crisis in nearly three decades.
The National Bureau of Statistics (NBS) reported today that headline inflation surged to 34.19% in June 2024, up from 33.95% in May, marking a 0.24 percentage point increase.
The economic hardship has been particularly severe in the food sector, with food inflation exceeding 40%, reaching 40.9% year-on-year in June 2024.
This sharp rise in food prices has put immense pressure on Nigerian households, with staple items becoming increasingly unaffordable for many.
The inflationary surge is attributed to multiple factors, including:
Currency depreciation, with the official exchange rate averaging N1471/US$ in June 2024, compared to N769/US$ in June 2023.
Rising transportation costs following the removal of fuel subsidies.
Ongoing security challenges are affecting agricultural production.
The economic downturn has had a devastating impact on poverty levels. The World Bank projects that approximately 40.7% of Nigerians will be living below the international poverty line by the end of 2024.
This represents a significant increase from 40.1% in 2018, pushing millions more into poverty.
President Bola Tinubu’s administration, which came to power promising renewed hope, now faces mounting criticism for its economic policies. The abrupt removal of fuel subsidies in May 2023, without adequate compensatory measures, has been cited as a contributing factor to the current crisis.
As public frustration grows, there have been reports of protests across the country. The government is under increasing pressure to implement effective measures to stabilize the economy and provide relief to struggling citizens.
Economists warn that without significant policy interventions, the situation could worsen. The World Bank had previously predicted that economic reforms would begin to show positive effects in early 2024, but current data suggests a more challenging path ahead.
As Nigeria navigates this economic storm, the coming months will be crucial in determining whether the government can reverse these trends and deliver on its promises of economic stability and growth.
