|
Listen to article
|
With inflation showing signs of easing, financial and economic analysts predict that the Central Bank of Nigeria’s Monetary Policy Committee may move to cut the benchmark interest rate. The data, released on Tuesday by the National Bureau of Statistics, suggests a potential shift in the CBN’s stance as policymakers weigh strategies to balance economic stability and growth.
In addition to analyzing the inflation figures, experts have advocated for a recalibration of Nigeria’s economic policies to better serve the public. They cautioned that while the latest data suggests a decline in inflation, the reality on the ground tells a different story, as food and essential goods remain out of reach for many households.
The National Bureau of Statistics (NBS) announced on Tuesday that Nigeria’s headline inflation rate fell to 24.48% in January 2025, following adjustments to the Consumer Price Index (CPI). This marks a sharp drop from the 34.80% recorded in December 2024, a change attributed to the rebasing exercise aimed at providing a more accurate reflection of economic conditions.
The Statistician-General of the Federation, Prince Adeyemi Adeniran, made this announcement during the official presentation of the newly rebased Consumer Price Index (CPI) report in Abuja, emphasizing its significance in providing a more accurate measure of inflation trends.
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.
Read also: Reverse ATM Charge In 48Hrs Or Face Legal Action – SERAP To CBN
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.
