Nigeria’s Headline Inflation rose on a year-on-year basis in March 2024 to 33.20%, up by 150 basis points from 31.70% recorded in February 2024. Conversely, on a month-on-month basis, Headline Inflation declined by 10 basis points to 3.02% in March 2024 (February 2024: 3.12%).

The month-on-month contraction in Headline Inflation was solely due to the 17 basis points decline in Food Inflation to 3.62% in March 2024 (February 2024: 3.79%). However, on a year-on-year basis, Food Inflation trended upwards, crossing the 40% mark to settle at 40.01% (February 2024: 37.92%).

Core Inflation (which includes all items less farm produce and energy) also rose year-on-year to 25.90% in March 2024 (February 2024: 25.13%). Contrary to our expectation of a sustained month-on-month reduction in Core Inflation as FX liquidity improves, the data showed an increase to 2.54% in March 2024 (February 2024: 2.17%).


Adding to the existing drivers of inflation in the economy, a significant factor contributing to our expectation of sustained inflationary pressure is the new electricity tariff rate of nearly four-fold implemented in April 2024. For band A users, the electricity tariff rose from N68 to N225, and we expect to see the impact of this increase in the April 2024 inflation report. Our projection for April 2024 Headline Inflation is 34.76%.

Policy Expectation

While the implemented rate hike is yet to have a significant impact on the Country’s inflation rate, we do not expect the tightening stance of the monetary policy to change. To this effect, yield in the fixed income market is expected to remain high as the monetary authorities maintain their hawkish rendition.

The rate hike dampened investors appetite for the equities market as they re-routed their funds to fixed income for higher yields. Reflecting this trend, the all-share index has been in the negative zone since the last rate hike, with the return standing at -2.09% as of the time of writing this report.

Click here “March 2024 Inflation – Expectation of Sustained Month-on-Month Decline Wanes” to view the full report.

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