The National Bureau of Statistics has rebased Nigeria’s Consumer Price Index (CPI), using a new base year of 2024 to enhance the accuracy of inflation tracking. The upgraded CPI now includes 934 product varieties classified under 13 divisions. Recent reports indicate a headline inflation rate of 24.48% for January 2025, highlighting ongoing economic challenges, particularly in food and transportation costs. The rebased CPI aims to inform effective policy-making and reflect current consumer dynamics more effectively.
A newly rebased Consumer Price Index (CPI) represents a critical advancement in tracking inflation in Nigeria. The CPI measures the weighted average prices of goods and services consumed by households, indicating the rate at which prices change in the economy. The National Bureau of Statistics (NBS) has recently updated the CPI after over a decade, using a base year of 2024 to ensure more accurate economic indicators.
A variety of indices contribute to the CPI, including Urban and Rural National Index, Headline Index, Food Index, Core Index, and several others. Experts recommend that the CPI be revised every five years to account for changes in consumption patterns, which necessitated this latest update. The last rebasing utilized 2009 figures, prompting the need for a refreshed approach to represent current economic activities more accurately.
The announcement of the new CPI occurred on February 18, led by the Statistician-General of the Federation, Prince Adeyemi Adeniran. The revisions aim to reflect the dynamic nature of the economy, incorporating broader emerging sectors and refining the methods of data collection. The updated CPI now comprises 934 product varieties aligned with the 2018 Classification of Individual Consumption According to Purpose (COICOP), increasing from the previous count of 740.
This updated framework also introduces improvements, such as excluding non-monetary items from the calculated weights. Adjustments have been made to expenditures on meals away from home by categorizing them under ‘Restaurants.’ Special inflation indices have been introduced to better gauge specific sectors, reflecting a comprehensive approach to tracking price changes.
In summary, the weight reference period is now 2023, and the revised CPI’s base year is set to 2024, improving alignment with current household expenditures across 13 classified divisions. The NBS used rigorous data collection techniques involving interviews and computer-assisted methods to ensure high-quality information was captured.
The NBS revealed an All-Items Index of 110.7 for January 2025, reflecting a year-on-year headline inflation rate of 24.48%, indicating an increase in general prices compared to the previous year. Economic analysts explain that while the rebased results provide a modern perspective on inflation trends, they do not imply a decrease in prices or lessen the government’s ongoing initiatives aimed at controlling inflation.
Despite expectations that the inflation rate would fall below previous figures, the Central Bank of Nigeria maintained the Monetary Policy Rate at 27.59%, citing the influence of the new CPI data. Government measures tailored to improving food availability are ongoing, yet challenges remain in food and transportation costs, which remain pivotal in influencing inflation rates.
Experts emphasize the importance of addressing transportation costs to effectively mitigate inflationary pressures. Professor Uche Uwaleke noted the significance of these changes, stating that addressing the cost of transportation is crucial to reducing overall inflation rates. Dr. Paul Alaje remarked that this rebasing marks a positive shift, suggesting potential renewed investor confidence with fresh inflation data.
The NBS is optimistic that the rebased CPI can provide valuable insights for monitoring economic trends and informing effective policy decisions going forward, focusing on the changing consumption patterns among Nigerian households. This initiative is expected to facilitate precise price tracking across various sectors and contribute to the future development of Nigeria’s economy.
The recent rebasing of Nigeria’s Consumer Price Index (CPI) signifies a strategic upgrade in inflation measurement, reflecting current economic realities and consumption patterns. The initiative, driven by the National Bureau of Statistics, introduces comprehensive changes, including enhanced data collection and categorization techniques. As Nigeria aims to manage inflation, especially in essential categories like food, the rebased CPI will support informed policymaking and economic growth.
Original Source: nannews.ng
