By Chidi Ugwu
In a welcome respite for Nigerian consumers, the country’s inflation rate has taken a notable dip, dropping to 24.48% following the rebasing of the Consumer Price Index (CPI). This downward trend, announced by the National Bureau of Statistics (NBS), signals a potential shift in the country’s economic fortunes, and raises hopes for a more stable financial outlook. We’ll delve into the details of this development and explore what it means for Nigeria’s economy.
Statistician General of the Federation and Chief Executive officer of NBS, Prince Adeyemi Adeniran disclosed this Tuesday in his address while briefing Journalists on CPI Rebase results in Abuja.
The Coordinator of the National Statistical System said the “All-Items Index which is used to measure headline inflation for January 2025 was 110.7, resulting in a headline inflation rate of 24.48% on a year-on-year basis.
According to him, the increase was mainly driven by Food and NonAlcoholic Beverages, Restaurants and Accommodation Services and Transport.
He said the Food Index for January 2025 was 110.03, resulting in a Food Inflation rate of 26.08% year-on-year.
“The Core Index which is All-Items less farm produce and energy for January 2025 was 110.7, which gave rise to a Core Inflation rate of 22.59% year-on-year”, he said.
In disaggregating by sector, the Urban inflation rate was 26.09%, while the Rural Inflation rate was 22.15%.
He noted that in line with improvements made to the reporting of the CPI, going forward, NBS will be publishing some new special indices to inform policymakers.
These special indices include the Farm Produce Index, Energy Index, Services Index, Goods Index, and Imported Food Index.
For January 2025, these new special indices produced the following inflation rate (please note that these rates are not year-on-year rates as the headline rates mentioned above) as these indices are new, the year-on-year rates will commence from January 2026, while the month-on-month rates will commence in February 2025.
He clarified that the rates being reported here are January compared to the base year, which is an average of prices in 2024.
“This rebasing process also allows Statistical Offices to introduce methodological enhancements to their computation procedures and align with global best practices.”
“Under this process, NBS is not only bringing the base year closer to the current period, from 2009 to 2024, but we have also introduced some critical methodology changes to improve the computation processes and quality of the estimates.
“Under the CPI, important enhancements have been made to the methodology. Some of the improvements include the transition to the latest version of the classification method, the Classification of Individual Consumption According to Purpose (COICOP) 2018 version, from the 1999 version of COICOP.
According to him, the new version has 13 divisions, bringing in household expenditure on Insurance and Financial Services, which now has a weight of 0.5% relative to the total household expenditure.
Another important improvement is the exclusion of own-production, imputed rents, and gifted items from the aggregates used to come up with the weights. This is because CPI is a monetary phenomenon. Hence, the computations should only include monetary expenditure. Also implemented under this rebasing is the movement of expenditures on meals away from home to the appropriate divisional class. These changes are quite significant and appropriately align expenditures to their respective classes, enabling price changes to be measured properly.”
While reiterating that the rebasing was free from political interference, he said January’s inflation would still have dropped if the rebasing was not carried out.
Earlier in his welcome address at the occasion, the Director of Communication and Public relations, Mr Sunday Joel Ichedi appreciated the management of NBS for their dedication in contributing immensely towards the rebasing of the CPI, aside the media partners, whose role in disseminating statistical information to the public is invaluable.
