THE administration of President Bola Tinubu has fallen short of its 2024 inflation target as figures consistently exceeded the projected 21.40 per cent throughout the year.
Data from the National Bureau of Statistics (NBS), analysed by The ICIR show that monthly inflation rates ranged between 29.90 per cent in January and 34.19 per cent in June, causing significant economic challenges for Nigerians.
The 2024 national budget had set an ambitious inflation target of 21.40 per cent aiming to stabilise the economy and improve citizens’ purchasing power.
However, this was consistently unmet, with inflation figures peaking at 34.19 per cent in June and remaining above 32 per cent through the latter months of the year.
By October, inflation stood at 33.88 per cent, showing the administration’s inability to rein in price surges across various sectors of the economy.
For many citizens, this wasn’t just about numbers. Throughout 2024, many Nigerians struggled under the weight of rising inflation. The ICIR reports that the persistent rise in inflation has exacerbated economic hardships for millions of Nigerians, with the cost of food, transportation, housing, and other essential goods and services soaring.
The ICIR, in several reports, highlighted how this has reduced the standard of living and plunged more households into poverty.
Citizens and market traders report that the price of staple foods such as rice, garri, and beans has nearly doubled compared to the previous year.
Trend
Since President Bola Tinubu came into office on May 29, 2023, Nigeria’s inflationary pressure has surged considerably from 22.4 per cent, caused by the administration’s twin policy of fuel subsidy removal and exchange rate unification that has stoked the country’s economy.
In July 2024, Nigeria’s headline inflation dropped slightly to 33.4 percent from 34.19 percent in June—the first decrease recorded since Tinubu took office in May 2023. The decline was modest, representing a 0.8 percent reduction.
According to the National Bureau of Statistics (NBS), the inflation rate declined by 0.8 per cent compared to the June 2024 headline inflation rate of 34.19 per cent.
The following month, August, the inflation rate fell further to 32.15 per cent, marking the second consecutive decrease. The NBS report showed that headline inflation decreased by 1.25 per cent points when compared to the 33.40 per cent rate reported in July.
The ICIR reported that as of September 2023, Tinubu’s policies set a new inflation record for the nation in 20 years, making his administration sustain inflation rise consistently more than any leader in the nation.
Also, when the inflation rate reached 28.92 per cent in December 2023, The ICIR reported that it consistently increased throughout the year.
Hard turn on citizens
The skyrocketing inflation and the unfriendly policies by the Tinubu administration, in August and October, fuelled widespread protests across Nigeria.
The #EndBadGovernance protest, which took place from August 1 to August 10, was widely referred to as a “hunger protest” or “hardship protest,” with demonstrators expressing their frustration over the worsening economic conditions.
The protesters accused the administration of neglecting the root causes of inflation and failing to take meaningful action to alleviate the suffering of ordinary Nigerians.
They also argued that several of the government’s key policies have exacerbated inflationary pressures. The removal of the petrol subsidy in 2023, though touted as a necessary fiscal reform, led to a dramatic increase in fuel prices, driving up transportation and production costs.
Similarly, they noted that the liberalisation of the naira exchange rate resulted in currency devaluation, which in turn made imports more expensive and contributed to further inflation.
In addition to these policy missteps, financial experts point to other factors that have intensified the inflation crisis. Supply chain disruptions and insecurity in key agricultural regions have made it increasingly difficult for farmers to produce and transport goods safely.
This has led to food shortages, further driving up prices and worsening the cost of living for many Nigerians.
In an interview with The ICIR, Aisha Mohammed, an Abuja-based food vendor, lamented the challenges of affording staple goods. According to her, the rate at which residents patronise her shop has significantly decreased with some of them opting for an instalment good.
“A bag of rice that used to cost around N30,000 last year now costs N95,000 or so. How do they expect people to patronise us? Every day is a struggle for us to get our goods sold out.
“It’s even sad that many people come here to get this stuff in credit. And that doesn’t help the flow of our market,” she said.
Experts weigh in
Financial and economic experts, who spoke with The ICIR, have criticised the Tinubu administration’s inability to meet its set out inflation rate on policy decisions made in the last 18 months.
A developmental economist, Celestine Okeke, explained that the rising cost of petrol is a major contributor to inflation. “When fuel prices go up, it’s not just about households using fuel for generators or cars. But what do the vehicles move around? They move around food, they move people around. So, with the rising cost of fuel, on the one hand, it brings about inflation.
“And you also see that we took our subsidy on fuel and took our subsidy on energy. Distribution companies are going to build their band A, band B, and all of that. And then the foreign exchange too, the subsidy was taken off and cost of almost everything shot up at the same time.
“The government cannot be setting a target of 21.40 per cent when it had gone ahead to remove the subsidies, especially the energy subsidy. Once you remove subsidies on energy, it will reverberate around the entire economy. So, it’s basically the policies that were implemented from 2023 when this decision came in to where we are now. That is what has gotten us into this very place,” he said.
While acknowledging the complexity of Nigeria’s inflation crisis, the analyst emphasised the need for a long-term, holistic approach to boost economic productivity.
“What can the government do to increase productivity? Even in the agricultural sector, there’s so much that needs to be done. For a start, we need to get around the issue of climate change. We need to get around the issue of insecurity that is affecting several farming communities.
“We need to get around the issue of low adoption of technology for farmers and all of that. Since government has taken out the subsidy on fuel also, it needs to begin to find ways to reduce the cost of business oppression for companies…
“Let’s not fool ourselves to think we can beat this inflation thing down in 12 months. To take consistent planning over a long period of time for us to be able to do anything. It just applies to commodity prices,” he said.
Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M