Understanding Inflation in Nigeria: A Simple Guide
Every month, Nigeria’s Bureau of Statistics (NBS) shares information about inflation, which is how much prices are going up or down. When they do, many people in Nigeria feel confused. They wonder, “Why does the official number about inflation look so different from what I feel in my own life?”
Let’s look at an example. In August 2024, NBS said the inflation number was 784.4. This was more than the 593.6 from August 2023. That means prices went up by 32.15% in one year. So, something that cost N1,000,000 in August 2023 would cost N1,321,500 in August 2024. Many people look at this with surprise and think, “Really?”
Why the confusion? The big number from NBS is an average. It tries to show how prices are changing for the whole country. It doesn’t show how prices are changing for just one thing or for what one person buys. It gives an idea if prices are going up or down in general.
So, what does this mean for you? Well, it changes for everyone. Each person has their own inflation rate. This depends on what you buy and where you are. For example, if someone lives in Lekki and buys food from fancy stores, their prices are very different from someone in Ajangbadi who buys simpler foods like Pap and Akara.
If you run a small business, your own inflation rate depends on what you spend money on. For example, if you own a restaurant, the costs for food and staff are important. But if you own a school, the cost of books and teachers are more important.
To know how inflation affects you, look at the detailed data from NBS. They show prices for different things. They look at averages for goods and services, like food and housing. They also look at where you live—are you in a city or a village?
If you’re in a city, prices go up faster than in villages. This is because bringing food and other things into the city costs more. Also, things might be more expensive in different states. For example, food is very expensive in Sokoto, and prices, in general, are highest in Bauchi.
Why should you care about your inflation rate? For people, it’s important to know how much money you need to earn to live. You might think about moving to a cheaper place. For businesses, tracking prices helps to keep profits safe and make sure you pay workers enough so they don’t leave for other jobs.
As you plan for 2025, use available data to make sure your money plans are on track. Keep adjusting as new inflation data comes out. In a world where prices keep going up, planning is important so you can grow instead of just getting by.