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Nigeria’s inflation rate has taken a significant dip, dropping to 24.48% in January 2025, according to the National Bureau of Statistics (NBS). This new figure represents a substantial decrease from the 34.80% inflation rate recorded in December 2024.

The Statistician General of the Federation, Prince Adeyemi Adeniran, revealed that “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.” He attributed this increase mainly to food and non-alcoholic beverages, restaurants and accommodation services, and transport.

The NBS launched the Report of the Rebasing of the Consumer Price Index (CPI), which has removed expenditures on food to the appropriate division class and excluded own production, rents, and gifted items. The new version of the CPI has brought household expenditure on insurance and financial services to total household expenditure. As Prince Adeniran explained, “The new version has 13 divisions, bringing in household expenditure on insurance and financial services, which now has a weight of 0.5 percent relative to the total household expenditure.”

The rebasing of the CPI aims to provide a more accurate reflection of consumer spending patterns and economic conditions in Nigeria. According to Adeniran, the enhancements to the methodology will make price estimates from NBS more reflective of current inflationary pressure. However, he cautioned that the latest data should not be interpreted as reflecting a sharp slowdown in inflation, stating, “It’s not saying prices have come down in the market to this rate, but the rate of change between January 2024 and January 2025 is what the inflation rate is all about.

Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, noted that financial markets had not expected the rebasing to make such a big difference to the headline inflation rate. She suggested that January’s lower figure could potentially open the door for an interest rate cut at the central bank’s monetary policy meeting.

Mudal Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise, reacted to the new inflation data, saying, “The sharp deceleration of the headline inflation rate… did not come as a surprise given the review of the computation base year from 2009 to 2024.” He emphasised that the drastic reduction in inflation figures is not equivalent to a reduction in price level, but rather a reduction in the rate of increase in the general price level. Yusuf hopes that the government will recalibrate its strategies to address major cost drivers, ultimately leading to a substantial moderation in prices

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