Fighting inflation through rebasing

The National Bureau of Statistics (NBS) has brought down inflation by well over 10 per cent. NBS recently announced a rebased consumer price index (CPI) with an updated price reference period using 2024 as the base year and weight reference period showing 2023 as the reference year.

With the rebasing of the CPI Nigeria’s inflation rate dropped to 24.48 per cent in January 2025, down from 34.80 per cent in December 2024. Food inflation dropped from 39.84 per cent in December 2024 to 26.08 per cent in January 2025.

NBS claims that the rebasing of the CPI enables it to present an inflation data accurately reflecting the current economic structure and consumer spending patterns. 

The rebasing, which is the revising of the weight of the various goods and services in the CPI calculation, has presented the country’s inflation rate at a lower rate than the previous index. The updated basket shows a decrease in the cost of living when compared to the previous index. 

Pundits however contend that the NBS rebasing of the CPI is more of cosmetic approach to a deadly problem. It has failed to address the cost of goods and services.

For instance, even as the NBS was boasting of reducing inflation rate by well over 10 per cent through rebasing, the price of a 50 kg bag of rice remained defiantly exorbitant at N90,000. Three years ago, that quantity of rice sold for N25,000.

Nigerians will clap for anyone who will bring down the prices of food in the market. The rebasing and its reduced rate of inflation is appreciated for its cosmetic value, however, what everyone is itching for are the kind of measures that will make the prices of goods and services affordable to consumers.

Those who believe that what goes up in Nigeria never comes down are not fair to the managers of the economy. The price of tomatoes has dismantled that pessimist concept.

Sometime in 2024, a basket of tomatoes sold for a record price of N250,000 due to scarcity caused by a fungal infection that disrupted tomatoes production. 

Two weeks ago the price of a basket of very attractive tomatoes dramatically dropped to a record N8,000. Even at that level, retailers are still taking a pound of flesh from consumers. The retail price of tomatoes remains unaffordable despite the drastic reduction in wholesale price.

Retailers still sell six or seven fruits of tomatoes for N500. In view of the fact that a basket of tomatoes contains more than 1,000 fruits, it is obvious that retailers may make well over N70,000 from a basket of tomatoes bought at a paltry N8,000.

Blueprint appreciates the CPI rebasing by NBS. However, we enjoin the federal government to take steps to ease the retailers’ merciless grip on consumers.

Nigerian consumers are waiting for a time when someone in the Federal Competition and Consumer Protection Commission (FCCPC) will effectively rein in the excesses of Nigerian retailers and transporters.

The truth is that despite the rebasing by NBS and the cosmetic reduction in inflation rate, Nigeria’s inflation has reached a point where government must introduce explicit price control measures.

The federal government believes that it operates an open market economy where the invisible hands of market forces of demand and supply fix prices.

The truth however is that, merciless retailers and the unlettered men in the National Union of Road Transport Workers (NURTW) have usurped that function of price fixing from market forces.

Prices and transport fares are fixed by people who are not regulated by anyone. That is why consumers and commuters are being extorted.

The transport fare from Alakuko in Lagos state to Oshodi was raised to N1,000 when the pump price of petrol was hiked from N650 to N1,100.

The reason for the fare hike was beyond the increase in the pump price of petrol. The five kilometer stretch of the Lagos/Abeokuta highway from U-Turn to Toll Gate was a dead trap riddled by deep gullies that damaged transporters’ vehicles.

About three months ago the Minister of Works, Engineer David Umahi, ordered the rehabilitation of the failed portion of the road.

The minister’s directive was carried out within three weeks. The failed portion of the road which was abandoned for well over three years is now very smooth. 

Ironically the transport fare has remained virtually unchanged even as the pump price of petrol has dropped by well over N150 per liter while the road has been rehabilitated.

Since it is obvious that retailers and transporters have usurped the functions of the invisible hands of the market forces of demand and supply in the crucial fixing of prices and fares, the federal government must intervene to save consumers from their merciless grip.