Nigeria has announced a sharp drop in the nation’s inflation rate from 34.8% December figures to 24.48% in January 2025. The statement was made by Mr Adeyemi Adeniran, the Statistician General of the Federation, crediting the rebasing exercise to a recent exercise by the Nigeria Bureau of Statistics (NBS).
With this development, the price reference period (base year) changed from from 2009 to 2024 while the relative index changed from long to short term.
Also, according to the 2024 CPI weighting structure, food and non- alcoholic beverages top the basket with weight dropping from 51.8 percent in 2009 to 40 percent in 2024, Housing, water, electricity and other fuels dropped from 16.7 percent to 8.4 percent. While transport increased from 6.5 percent in 2009 to 10.7 percent, education services increased from 3.9 percent to 6.2 percent, restaurants and accommodation increased from 1.2 percent to 12.9 percent in 2024.
According to the Statistician General, rebasing of the Consumer Price Index (CPI) became imperative with innovation, development, globalization, and changes in the production and consumption pattern of goods and services within the borders of the nation.
“Changes in the consumer pattern equally leads to a change in the general composition of the basket of items which is used to measure the average change in price levels in the economy. Given all these, it is necessary to move the base year to which the CPI index is measured, to a year much closer to the current period,” he said.
The Statistician General explained that 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 percent on a year-on-year basis. This increase he said was mainly driven by food and non alcoholic beverages, restaurants and accommodation, services and transport.
Also, the food index for January 2025 was 110.03, resulting in a food inflation rate of 26.08 percent year-on-year. The core index which is all-items less farm produce and energy for January 2025 was 110.7, which gave rise to a Core inflation rate of 22.59 percent year-on-year.
