Headline Inflation continues to surge to an unprecedented levels, reaching 31.70% in February 2024 according to NBS. This represents a year-on-year growth of 1.80% from January 2024 rate (29.90%). On a month-on-month basis, inflation rate rose by 3.12% in February 2024 (January 2.64%).

These incremental trend is primarily driven by the direct and indirect knock-on effect of Naira depreciation, prolonged insecurity affecting food production, and elevated energy cost impacting production and transportation costs.


In the last MPC meeting held in February 2024, the Committee hiked rate by 400 basis points, attributing inflationary pressures as a key factor in the decision-making process. However, we opine that beyond addressing excess liquidity in the financial system, the surge in prices, particularly in agricultural commodities, fueled by underlying structural weaknesses is poised to sustain inflationary pressures.

Policy Expectation

In the next MPC meeting which is scheduled to hold on March 25 & 26 2024, we anticipate that the Committee will maintain their aggressive stance as they continue the inflation targeting strategy. Despite successive hikes, the impact is yet to be seen as Headline Inflation rallied above 30% cross mark due to the lag in the transmission mechanism and other legacy issues.

On the other hand, the rate hike is expected to sustain the influx of investors (local and foreign) towards the fixed income space to capture improved yield and that could lead to a waning interest in the equities market.

Click here “February 2024 Inflation – Inflation Rate Rises Persistently” to view the full report.

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