The rebased CPI in Nigeria updates the measurement of inflation by reflecting current consumption patterns and economic realities. The National Bureau of Statistics has revamped the index with improved classifications and methodologies, presenting a 24.48% headline inflation rate for January 2025. While this does not imply lower prices, it aims to better inform policy decisions and address ongoing inflation challenges, particularly in food and transport sectors.
Nigeria’s Consumer Price Index (CPI) has been rebased, reflecting a significant shift in inflation tracking due to changes in consumption and market dynamics. The CPI measures the average price changes in a basket of goods and services consumed by households, with the year-on-year change known as the headline inflation rate. This rebasing is crucial for accurate economic representation and was last conducted over a decade ago, using 2009 as the base year.
The National Bureau of Statistics (NBS) presented the rebased CPI results on February 18. According to the Statistician-General, Prince Adeyemi Adeniran, the rebasing allows for improved indicators that incorporate new market sectors and refine data collection methods. This step aligns Nigeria’s CPI with global best practices and reflects current economic realities.
Adeniran emphasized the need for periodic rebasing every five years to accommodate evolving consumption patterns. The new CPI framework introduces the Classification of Individual Consumption According to Purpose (COICOP) 2018 version, increasing the classifications from twelve to thirteen and adding categories such as household expenditure on insurance.
The rebased CPI now includes 934 product varieties compared to 740 prior to the update, and weights calculated exclude certain imputed values to ensure monetary accuracy. Special indices for food, energy, services, goods, and imported food are also included. The reference period for weights is now 2023, with the base year set at 2024.
To ensure rigorous data accuracy, the NBS utilized various methodologies for data collection, including questionnaires and structured interviews. This comprehensive approach invited stakeholder engagement to validate the rebase process. The results indicated a January 2025 All-Items Index at 110.7, correlating to a headline inflation rate of 24.48%. This figure reflects that the overall prices of goods and services increased compared to the previous year.
Economic analysts noted that while the rebased CPI does not indicate lower prices, it fundamentally measures the rate of price changes. The federal government’s efforts to mitigate inflation remain active, focusing on food availability and enhancing citizens’ purchasing power. Following the release of these figures, the Central Bank of Nigeria decided to maintain its Monetary Policy Rate at 27.59% to accommodate these economic shifts.
Experts have lauded the rebased CPI as a beneficial reform, but stress the need for effective government action against rising food prices and transportation costs. Professor Uche Uwaleke highlighted that addressing transportation expenses could significantly lower inflation. Dr. Paul Alaje noted that while the inflation trends may not reverse, the new figures could restore investor confidence in Nigeria’s economy.
Ultimately, the NBS aims for the rebased CPI to provide precise estimates that match current economic pressures and consumer patterns. This transparency will aid in developing targeted policies to foster Nigeria’s economic growth and stability.
The rebasing of Nigeria’s CPI marks a key development in the country’s economic tracking, updating its indicators to reflect current consumption patterns and inflationary pressures. It introduces improved classifications and methodologies, enhancing the accuracy and relevance of the CPI in policy formulation. While it indicates a rise in general prices, experts urge the government to actively address factors driving inflation, particularly in food and transportation sectors.
Original Source: nannews.ng
