Rebased inflation may attract investors, but no relief for Nigerians yet – Analysts

The recent adjustment of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) has led to a significant drop in Nigeria’s official inflation rate, however, economic analysts caution that while this statistical shift may enhance investor confidence, it does not translate into an immediate reduction in the cost of living for Nigerians.

Following the NBS’s methodological revision, the reported inflation rate fell sharply from 34.80 per cent in December 2024 to 24.48 per cent in January 2025.

The adjustment stemmed from a change in the reference year from 2009 to 2024, rather than a real decline in price levels across the economy.

Reacting to the new figures, Dr. Paul Alaje, CEO of SPM Professionals, clarified that the drop in inflation is purely a statistical adjustment rather than a reflection of improved affordability for essential goods and services.

“It’s not a reduction in inflation. It will be wrong for people to say inflation dropped from 34 per cent to 24 percent. That would be a misleading narrative. If inflation truly drops, we should see the reflection in prices, but that is not what we have seen,” Alaje stated.

“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 referencing 2024.’ Definitely, you’ll get a different [lower] figure,” Alaje added.

Despite the revised inflation rate, Nigerians should not expect a corresponding drop in market prices. Alaje noted that fundamental economic realities remain unchanged.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), echoed similar sentiments, warning against premature celebrations.

“In a statement, Yusuf said, ‘it is important to clarify that a drastic reduction in inflation figures is not tantamount to a reduction in the price level. Inflation reduction means a reduction in the rate of increase in the general price level, not a price reduction. The drastic deceleration in inflation should, therefore, be cautiously celebrated.’”

Dr. Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), emphasized that the rebased inflation figures do not address the economic hardship faced by many Nigerians.

“While the rebased inflation rate provides policymakers with a clearer view of economic trends, it does not resolve the rising cost of living. The government must implement targeted interventions to address inflationary pressures and improve economic stability,” Almona stated.

Economic analysts suggest that policymakers should complement the statistical adjustment with tangible measures to curb inflationary pressures. 

Without such interventions, the revised CPI figures may remain a technical adjustment with little real-world impact on Nigerians’ daily financial struggles.