Premised on recent events, economist Paul Alaje said that the National Bureau of Statistics’ (NBS) rebased inflation is beneficial for investor confidence but has not changed the economic realities that Nigerians face, such as high food costs.
He said that despite the new statistics on inflation, it does not mean that if you go to the market tomorrow, the price of food will have improved.
“Before this announcement, food inflation alone was about 51.8%, but in this new figure, food inflation of the total inflation now accounts for only 40%,” he added.
“Also, people who want to invest in our country, perhaps when they see a reduced inflation rate, will have confidence, and we need this.”
On Tuesday, the Bureau rebased the Consumer Price Index (CPI), which monitors the pace at which prices for goods and services change. By rebasing the CPI, the Bureau changed the reference year used to assess price levels from 2009 to 2024.
By implication, the NBS stated that Nigeria’s headline inflation fell from 34.80% in December 2024 to 24.48% in January 2025.
Alaje said, “It will be wrong for people to say inflation dropped from 34 to 24%. That will be a wrong narrative. If it drops, we should see the reflection in prices, but that is not what we have seen.”
The economist said the right word to use is ‘change’ and not ‘drop’.
“What the Bureau of Statistics has done today is not to say that inflation dropped. The Bureau is saying: ‘we are no longer going to reference 2009 as the base year; we will now start reference 2024’,” he said.
In 2009, Nigeria used 20 hours per week as an employment measure, but now the country uses one hour per week as a gauge for employment.
He cited two key decisions of the government – subsidy removal and floatation of the forex rates and noted that “the wisest thing to do is to make the necessary adjustment”.
Last December, President Bola Tinubu expressed optimism that Nigeria’s inflation rate will decrease to 15% by 2025. However, analysts such as Alaje and Bismarck Rewane deemed the president’s target unachievable.
