Breaking: Nigeria's inflation surges again to 32.70%, defying expectations

Nigeria's headline inflation rate unexpectedly accelerated in September 2024, dashing hopes for a continued decline. The National Bureau of Statistics reported a jump to 32.70% from 32.15% in August, primarily driven by rising food, transportation, and energy costs.

The uptick in prices comes as a blow to policymakers who had been celebrating a recent easing of inflationary pressures. 

The Central Bank of Nigeria (CBN) has aggressively raised interest rates throughout the year to combat soaring food prices, culminating in a 30-year high of 27.25% in September 2024.

Analysts had anticipated a further slowdown in inflation due to the progress made in the harvest season. However, the latest data suggests that the downward trend has been short-lived.

"A short-term solution could involve fiscal measures to address the rising cost of fuel," said Samuel Onyekanmi, an analyst at Norrenberger. "While global crude prices are beyond Nigeria's control, exchange rate stability and local fuel supply can play a crucial role in curbing inflation."

The CBN Governor, Yemi Cardoso, has indicated a hawkish stance for the upcoming monetary policy meeting in November. Another rate hike could further tighten financial conditions and impact lending activities in the banking system.