Mohamed Garba
In a significant economic development, Nigeria’s National Bureau of Statistics (NBS) has announced a decline in the country’s headline inflation rate to 24.48% year-on-year for January 2025. This decrease follows a comprehensive rebasing of the Consumer Price Index (CPI), updating the base year to 2024 to more accurately reflect current consumption patterns. In contrast, December’s inflation rate stood at a higher 34.80% under the previous base year.
The rebasing exercise was undertaken to align the CPI with the evolving spending habits of Nigerians, ensuring a more precise measurement of inflation.
The NBS emphasized that while the rebased figures indicate a lower inflation rate, this does not necessarily mean a reduction in the general price level. Instead, the updated base year offers a more relevant comparison for current price changes.
The recent surge in inflation prior to the rebasing can be attributed to economic reforms implemented by President Bola Tinubu’s administration in 2023. These reforms included the removal of costly subsidies and the devaluation of the naira currency, aiming to improve public finances and stimulate economic growth. While these measures initially led to higher inflation rates, the government anticipates that the long-term effects will stabilize the economy and reduce inflationary pressures.
Looking ahead, the Central Bank of Nigeria projects that the country’s Gross Domestic Product (GDP) will grow by 4.17% in 2025, driven by ongoing reforms and stabilizing inflation. The bank also expects foreign exchange reserves to rise gradually, supported by increased oil production, which is forecasted to reach 2.3 million barrels per day by mid-year.
The rebasing of the CPI and the subsequent adjustment in the inflation rate underscore the Nigerian government’s commitment to adopting accurate economic indicators. These efforts aim to provide a clearer picture of the nation’s economic landscape, enabling policymakers to make informed decisions to foster sustainable growth and development.
