Nigeria has rebased its Consumer Price Index (CPI) after over a decade, updating its base year and improving classification systems. The new CPI structure better reflects current economic realities, showing a headline inflation rate of 24.48% for January 2025. This update highlights the need for effective government policies to regulate inflation and enhance economic stability.
Nigeria has recently updated its Consumer Price Index (CPI), vital for monitoring inflation, reflecting the economic shifts over the past decade. The CPI captures the average price of a basket of goods and services consumed by households, reported monthly by the National Bureau of Statistics (NBS). Rebased approximately every five years globally, Nigeria’s last update was overdue by over a decade, using 2009 as its base year until now.
The newly rebased CPI was announced on February 18 by Prince Adeyemi Adeniran, the Chief Executive Officer of the NBS. The update was implemented to better reflect Nigeria’s current economic structure by incorporating new sectors, updating consumption baskets, and adopting improved data collection methods. The process aims to align with global best practices, ensuring that the CPI accurately represents current inflationary pressures.
Adeniran detailed that the change is crucial since economic dynamics shift with innovations and alterations in production and consumption within Nigeria. The rebased CPI introduces a new classification system, the 2018 Classification of Individual Consumption According to Purpose (COICOP), which expands divisions from twelve to thirteen and categorizes expenditures more accurately, including household spending on “Insurance and Financial Services.”
The update now covers 934 product varieties, significantly up from the previous 740. Expenditure on imputed rents, own-production, and gifted items has been excluded to focus solely on monetary spending. Expenditures for “meals away from home” have been appropriately classified under “Restaurants.”
The methodology involved comprehensive fieldwork with rigorous data collection through structured interviews and digital tools for real-time updates. This process engaged various stakeholders, enhancing the transparency and quality of the data collected, ensuring it aligns with current economic activities.
The rebased CPI indicated an All-Items Index of 110.7 for January 2025, leading to a headline inflation rate of 24.48 percent compared to January 2024’s rate of 29.90 percent. Rising prices for food and services notably influenced this increase. Adeniran clarified that the CPI reflects the rate of price changes rather than a reduction in overall prices.
The recent rebased Consumer Price Index (CPI) in Nigeria marks a significant advancement in tracking inflation by reflecting updated economic realities. The transition to a newer classification system and methodology enhances data accuracy, allowing for more informed policy-making. However, ongoing government commitment to controlling inflation, particularly in essentials like food and transport, is crucial to ensure sustainable economic growth.
Original Source: nannews.ng
