+Lessons for urban folks to learn from rural residents
Nigeria’s urban inflation is higher than rural inflation. According to the latest National Bureau of Statistics (NBS) inflation report, urban inflation was higher than rural inflation in October 2024, continuing a trend observed over the past 22 months.
This difference is a typical occurrence, driven by increased exposure to cost drivers such as rent, food, imported food, transportation and health expenses. Urban inflation consistently surpasses rural inflation due to these factors.
Although it is typical for urban inflation to be higher than rural inflation, Nigeria has had some exceptions where rural inflation was higher than urban inflation.
The period from June 2008 to December 2011 stands out in Nigeria’s inflation history, with rural inflation consistently surpassing urban inflation for 41 consecutive months.
This change might have been due to inefficient supply chains, poor rural infrastructure, and growing prices for agricultural inputs like fertilizer and seeds.
The gap between urban and rural inflation stems from structural differences in economic activities, consumption patterns, and integration with global markets.
Urban areas rely heavily on formal markets and imported goods, making them more prone to global economic shocks, exchange rate pressures, and infrastructural challenges.
In contrast, rural inflation is majorly shaped by local agricultural production and minimal interaction with global supply chains.
Urban inflation can be explained through the interplay of demand-pull, cost-push, and structural inflation dynamics. Cost-push issues like ineffective transportation systems and rising fuel prices make it more expensive to get commodities to cities, which drives up prices.
Rapid urbanisation also raises demand for housing, which is consistent with demand-pull inflation, since a shortage of available housing raises rents and property values.
Due to exchange rate changes and tariffs which raise costs and are passed on to consumers, urban economies that rely largely on imported commodities are vulnerable to imported inflation.
Also, a breakdown of responses by settlement types reveals that urban dwellers consistently perceive inflation as being higher than rural settlers. According to the Central Bank of Nigeria (CBN) inflation perception survey of October 2024, urban residents report a stronger awareness of inflationary pressures.
Adijat Kareem is a research and data analyst at Dataphyte with a background in Economics. She is passionate about data and storytelling in driving social change and innovation.
