(Ecofin Agency) - Nigeria's inflation rate rose again from September to October 2024, reaching 33.88%. Between January and October 2024, the Nigerian naira lost 82% of its value, according to data analysis firm Dataphyte.

The Central Bank of Nigeria (CBN) has increased its benchmark interest rate by 25 basis points to 27.50% from 27.25% in September. This decision was made during the bank’s monetary policy committee meeting held on November 25 and November 26, 2024.

The rate hike comes in response to growing inflation pressures, particularly from rising food prices. Overall inflation climbed to 33.88% in October, up from 32.7% in September 2024. Similarly, food inflation rose to 39.16%, compared to 37.77% during the same period. Core inflation also increased.

The bank attributed the inflation spike to higher energy costs, especially for fuel, which have driven up production and distribution expenses for food and manufactured goods.

The monetary policy committee expressed concern over the rising inflation, saying it indicates persistent price pressures with negative effects on citizens’ incomes and well-being. However, the committee remains cautiously optimistic that prices may stabilize in the short term, despite the current inflationary surge.

Nigeria has been grappling with economic challenges linked to government reforms aimed at stabilizing the currency. Measures such as removing subsidies on essential goods have significantly raised the cost of living, sparking protests across the country. In response, the government increased the minimum wage and raised public sector salaries.

According to data analytics firm Dataphyte, the Nigerian naira lost 82% of its value between January and mid-October 2024, dropping from 896 naira to 1,635 naira against the dollar. This decline is attributed to exchange rate policies implemented by President Bola Tinubu, who took office in May 2023.

For its 2025 budget plan, Nigeria’s government has projected an exchange rate of 1,400 naira for a dollar.