Nigeria’s Inflation Rate Drops on Paper, But Reality Tells a Different Story
Despite the National Bureau of Statistics (NBS) announcing a sharp decline in Nigeria’s inflation rate to 24.48% in January 2025 from 34.80% in December 2024, many Nigerians remain skeptical. The reported drop, attributed to the rebasing of the Consumer Price Index (CPI), appears more like a statistical adjustment than a reflection of real economic relief for the average citizen.
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Rebasing CPI: A Technical Fix, Not Economic Relief
The rebasing of the CPI, which involves updating the reference year and adjusting the basket of goods and services used to measure inflation, is a standard international practice. However, its timing and impact raise questions about whether it genuinely reflects economic improvements or merely serves as a tool to manipulate inflation figures.
While the new inflation methodology may align Nigeria’s data with global standards, it does little to change the reality on the ground. The prices of essential goods and services continue to skyrocket, and ordinary Nigerians struggle with food insecurity, high transportation costs, and dwindling purchasing power.
Food Inflation and Living Costs Tell a Different Story
The reported decline in food inflation from 39.84% in December 2024 to 26.08% in January 2025 contradicts the experiences of everyday Nigerians. Market surveys indicate that staple food prices, such as rice, beans, and maize, remain at historically high levels. Traders and consumers alike dismiss the NBS figures, arguing that they do not reflect real market conditions.
Additionally, core inflation, which excludes volatile food and energy prices, allegedly dropped to 22.59%. Yet, the cost of petrol, electricity, and transportation remains prohibitively high, negating any supposed economic relief.
Central Bank’s Response and Economic Realities
Central Bank of Nigeria (CBN) Governor Yemi Cardoso has reiterated the bank’s commitment to fighting inflation and stabilizing the economy through coordinated fiscal and monetary policies. However, these policy measures have yet to translate into tangible benefits for citizens.
The reality is that inflation remains a key driver of economic hardship. The naira continues to depreciate against major foreign currencies, exacerbating import-driven inflation. Salaries remain stagnant, unemployment is rising, and businesses face an increasingly difficult operating environment due to high production costs.
Political and Economic Implications
The sudden drop in inflation figures raises concerns about transparency in Nigeria’s economic reporting. Some analysts suspect the government is using statistical adjustments to present a more favorable economic outlook ahead of upcoming policy reviews and potential international financial negotiations.
While rebasing the CPI may improve the technical accuracy of inflation measurement, it does not address the structural economic challenges Nigeria faces. Without tangible improvements in food supply, energy prices, and currency stability, the reported decline in inflation remains, at best, a paper victory with little real-world impact
Statistical Gymnastics vs. Economic Realities
Until real wages rise, food prices fall, and basic services become more affordable, Nigerians will continue to experience inflation differently from what official figures suggest. The rebased CPI may look good in government reports, but for the average citizen, inflation remains an ever-present economic burden.
The question remains: Is this inflation drop a genuine sign of economic recovery, or just another instance of statistical gymnastics?
Reference
Nigeria’s Inflation Rate Drops to 24.48% Following CPI Rebasing