The recent adjustment to Nigeria’s official inflation figures is generating debate about the consequences of the exercise and its impact on Nigerians. Following a Consumer Price Index (CPI) rebasing exercise, official data now shows a dramatic 10% decline in inflation, from 34.80% in December 2024 to 24.48% in January 2025.
Popular economist Bismarck Rewane questions the validity of these figures, asserting that they fail to capture the true economic challenges facing everyday Nigerians.
Rewane’s Scepticism
In a discussion on Channels TV, Bismarck Rewane argues that a 10% drop in inflation over a short period is highly unlikely. “There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he stated. According to Rewane, while statistical adjustments may yield impressive headline numbers, they do not necessarily reflect the persistent cost pressures experienced by ordinary citizens in local markets.
Understanding the Rebased CPI
The CPI rebasing involves updating the basket of goods and services used to calculate inflation—a necessary step intended to align the measure with current consumption patterns. This methodological change aims to improve the accuracy of inflation statistics by reflecting the modern economic landscape. However, some analysts caution that this recalibration can obscure the true picture by shifting focus away from essential commodities that significantly impact the cost of living. In essence, while the revised figures may appear promising on paper, they may not fully encapsulate the economic realities Nigerians face every day.
Despite the optimistic numbers produced by the new CPI methodology, everyday experiences in Nigerian markets tell a different story. Many consumers and market vendors continue to grapple with rising prices for essential goods—a reality that sharply contrasts with the reported 10% decline in inflation. Rewane’s critique underscores a critical issue: statistical improvements do not automatically translate into tangible relief for those struggling with day-to-day economic pressures. This divergence calls more careful communication of the purpose and benefits of rebasing Nigeria’s Consumer Price Index and highlights the need for policies that directly address the cost-of-living challenges confronting millions of Nigerians, especially measures to bring down the cost of food. These include investing more in transport links to food producing rural areas and in reviving agriculture extension services to boost productivity.
