Inflation figure not reflection of real reduction in price levels – LCCI

By Merit Ibe

The Lagos Chamber of Commerce and Industry (LCCI) has said the sharp drop in the inflation rate from 34.8% to 24.48% in January 2025 is primarily due to the rebasing of the Consumer Price Index (CPI) rather than a real reduction in price levels.

According to the chamber, despite the lower reported rate, inflation remains high, meaning prices are still rising, just at a slower pace.

“This difference does not indicate a sharp fall in prices but a revised way of calculating inflation.

“The drop in inflation from 34.8% to 24.48% is due to a change in measurement rather than a real decline in prices.”

Director General of the chamber, Chinyere Almona, stated that prices were still rising, wages remain stagnant, and unemployment is high, keeping real incomes under pressure.

“For most Nigerians, essential costs like food and transportation remain high, meaning living conditions will not improve unless there is a real reduction in the cost of necessities.”

Almona noted that while the rebased inflation rate provides policymakers with a clearer view of economic trends, it does not resolve the rising cost of living, advising that the government must implement targeted interventions to address inflationary pressures and improve economic stability.

“One key priority is tackling food inflation, which accounts for over 50% of price increases.

“Policies should focus on boosting agricultural productivity, reducing post-harvest losses, and improving transportation and storage infrastructure to ensure food affordability.

“Stabilizing the exchange rate is crucial, as naira devaluation has been a major driver of inflation. Encouraging local production and reducing reliance on imports can help strengthen the currency and control price surges.

“Fiscal discipline is also essential, as excessive government borrowing and deficit spending contribute to inflation.

“Reducing unnecessary expenditures while prioritizing infrastructure and social investments can help manage inflationary pressures.

“At the same time, the Central Bank of Nigeria (CBN) must carefully adjust monetary policies, ensuring interest rate decisions strike a balance between controlling inflation and sustaining economic growth.”