Nigeria’s inflation rate continued its persistent surge as the National Bureau of Statistics released its May 2023 CPI report. According to the report, the inflation rate hit 22.41% in May 2023, up from 22.22% in April, as the hike in inflation rate persists at a level unseen in over 17 years.
Since the inflation rate dropped to 21.34% in December 2022, the current increase marks the fifth consecutive month of inflationary hikes despite monetary policy measures implemented by the Central Bank of Nigeria.
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In May 2023, the month-on-month headline inflation rate rose to 1.94%, marking a slight increase of 0.03% compared to April 2023 (1.91%). This indicates that, on average, the overall price level in May 2023 was 0.03% higher than in April 2023. Likewise, the year-on-year headline inflation rate in May 2023 rose by 4.70% points compared to May 2022 (17.71%).
In May 2023, the year-on-year urban inflation rate reached 23.74%, marking a significant increase of 5.50% points compared to May 2022 (18.24%). Additionally, the month-on-month Urban inflation rate for May 2023 stood at 2.09%, showing a slight increase of 0.05% compared to April 2023 (2.05%).
However, the year-on-year rural inflation rate stood at 21.19%, indicating a notable increase of 3.98% compared to May 2022 (17.21%). Similarly, on a month-on-month basis, the Rural inflation rate for May 2023 experienced a slight rise to 1.80%, representing a marginal increase of 0.02% points compared to April 2023 (1.78%).
The primary drivers of inflationary pressure were food and non-alcoholic beverages (11.61%), which contributed the most significantly. This was followed by housing, water, electricity, gas, and other fuels (3.75%), and clothing and footwear (1.71%). In May 2023, the food inflation rate increased to 24.82%, showing a slight rise of 0.21% points compared to the previous month. Moreover, it was significantly higher by 5.3% points compared to the corresponding period of 2022, where it stood at 19.5%.
During the month under review, the core inflation rate, which excludes the prices of volatile agricultural produce, reached 20.06% on a year-on-year basis. This represents a notable increase of 5.16% compared to May 2022, which stood at 14.90%.
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For states of the Federation, Ondo (25.84%), Kogi (25.70%), and Rivers (25.02%) had the highest year-on-year inflation rates for all items in May 2023. Conversely, Taraba (19.55%), Sokoto (19.56%), and Plateau (19.89%) experienced the slowest increases in headline inflation on a year-on-year basis. Ondo (30.26%), Kogi (29.83%), and Kwara (29.52%) had the highest year-on-year Food inflation rates in May 2023. On the other hand, Sokoto (18.89%), Taraba (21.30%), and Kano (21.33%) experienced the slowest increase in Food inflation on a year-on-year basis.
With the recent removal of petrol subsidies and the adjustment of the foreign exchange (FX) rate at the official market, inflation is projected to sustain its upward trajectory throughout the year.
