Financial and economic analysts expect the Monetary Policy Committee of the Central Bank of Nigeria to reduce the benchmark interest rates following the drop in the inflation rate released by the National Bureau of Statistics on Tuesday.
The experts also called for a rejig of the country’s economic policies to meet the masses’ yearnings, stressing that though the new inflation rate is lower than the previous figure, the prices of commodities are still very high.
The NBS on Tuesday declared that Nigeria’s headline inflation dropped to 24.48 per cent in January 2025 following the rebasing of the Consumer Price Index.
This represents a significant decline from the 34.80 per cent recorded in December 2024.
The Statistician-General of the Federation, Prince Adeyemi Adeniran, disclosed this at the unveiling of the rebased CPI report in Abuja.
He 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 per cent on a year-on-year basis.
“This increase was mainly driven by Food and Non-Alcoholic Beverages, Restaurants and Accommodation Services and Transport.
”He explained that the rebasing exercise was necessary to ensure a more accurate reflection of inflationary pressures in the country.
Adeniran said the CPI rebasing involved shifting the base year from 2009 to 2024 to better capture changes in consumption patterns, pricing, and household expenditures.
He noted that Nigeria had not rebased its CPI in over a decade, even though the exercise is typically conducted every five years to reflect economic realities. With the rebasing, the methodology for computing inflation has been refined, including the adoption of the Classification of Individual Consumption According to Purpose 2018 version, which improves the categorisation of household expenses.
The Statistician-General also highlighted the exclusion of own-production, imputed rents, and gifted items from the inflation calculations to ensure the CPI only measures actual monetary expenditures. Food inflation for January 2025 stood at 26.08 per cent year-on-year, showing a notable decline from 39.84 per cent in December 2024.
Adeniran attributed the inflationary trend to food, beverages, clothing, and footwear, which were the major contributors to price movements during the period. Further analysis by the NBS showed that Urban Inflation was 26.09 per cent, while Rural Inflation stood at 22.15 per cent.
Core Inflation, which excludes farm produce and energy, was 22.59 per cent in January 2025.The rebased CPI also introduced new special indices to enhance inflation tracking, including a Farm Produce Index of 10.50 per cent, Energy Index of 8.9 per cent, Services Index of 10.41 per cent, Goods Index of 10.79 per cent, and Imported Food Index of 11.47 per cent.
Adeniran said the rebasing exercise involved consultations with key stakeholders, including the Central Bank of Nigeria, International Monetary Fund, World Bank, United Nations Economic Commission for Africa, BudgiT, and the Nigerian Economic Summit Group.
The Statistician-General urged journalists and analysts to report the rebasing results accurately to avoid misinterpretation, emphasising that the changes were not a manipulation of inflation figures but an effort to present a more realistic measure of price levels.
Adeniran assured that the new CPI methodology would improve the credibility of Nigeria’s inflation data, making it more reflective of current economic conditions and aligned with global best practices.