The National Bureau of Statistics (NBS) has revealed that Nigeria’s inflation rate for January 2025 stands at 24.48%, a significant drop from 34.80% recorded in December 2024. This sharp decline follows the rebasing of the Consumer Price Index (CPI), which measures the rate of change in prices for goods and services. The CPI rebasing process involved updating the reference year and modifying the basket of goods used to calculate inflation, which now more accurately reflects current consumer spending patterns.
The recalculated food inflation dropped to 26.08% in January, down from 39.84% in December, indicating a noticeable decrease in the cost of food items. Similarly, core inflation, which excludes volatile agricultural products and energy prices, decreased to 22.59% from 29.28% in the previous month.
The rebased CPI now uses 2024 as the base year, a change from the previous base year of 2009. This update aims to ensure the inflation figures better reflect the economic situation and consumption patterns of the current population. According to the NBS, the change in the base year means that the CPI now compares prices from 2025 with those of 2024 rather than 2009. The rebasing of the CPI basket also means that it now includes more relevant items that better represent the goods and services that Nigerians consume today.
Further adjustments in inflation rates showed a reduction in urban inflation, which fell to 26.09% in January, compared to 37.29% in December. Rural inflation also showed a decline, dropping to 22.15% from 32.47% in the previous month. These regional changes highlight the broader impact of the rebased inflation index across both urban and rural areas.
Despite these declines, the NBS clarified that the drop in inflation does not imply a decrease in the general price level of goods and services. Instead, the fall in inflation is largely due to the update of the base year and the modifications to the CPI basket. The NBS emphasized that the rebased CPI provides more accurate and relevant data, allowing governments, businesses, and households to make better-informed decisions regarding price levels and economic planning.
The rebasing of the CPI is part of a larger effort to ensure that Nigeria’s economic indicators, such as GDP and CPI, accurately reflect the current structure of the economy. According to the Statistician-General of the Federation, Adeyemi Adeniran, the rebasing process aims to incorporate new sectors, adjust consumption baskets, and refine data collection methods to ensure the government and policymakers have reliable statistics for decision-making.
This move also aligns with international standards and practices for measuring economic indicators and will enable policymakers to track the impact of their policies more effectively. The NBS’s revised inflation figures will allow better planning and implementation of policies aimed at achieving national development objectives and improving the economic situation for Nigerians.