….Prices of goods still high despite drop in inflation – CPPE
Nigeria’s headline inflation has dropped to 24.48% year on year in January 2025.
This is a sharp decline from the 34.80% headline inflation recorded in December 2024.
This is according to the National Bureau of Statistics (NBS). The Statistician-General of the Federation Adeyemi Adeniran announced this on Tuesday.
He said the Consumer Price Index (CPI) – which measures the rate of change in prices of goods and commodities – has declined to 24.48% year on year in January.
Adeniran who was speaking during a briefing in Abuja, explained that urban inflation stood at 26.09 per cent while rural inflation came to 22.15%.
He said that the general prices of goods and services in the country declined, compared to the 34.80% in December, which used the old template. According to him, the rebasing was to keep up with international standards.
CPI rebasing means updating the reference year used to gauge price levels in the country. This is essentially changing the basket of goods and services used to measure inflation to better reflect current consumer spending patterns and ensure the inflation data reflects the economy’s current.
According to the CPI figures for the period under review, the rebased food inflation stood at 26.08% year-on-year in January, representing a decline in the food index when compared with 39.84% year-on-year recorded in the preceding month.
Similarly, the rebased core index which excludes the prices of volatile agricultural produce and energy stood at 22.59% year on year in January.
According to the NBS, the rebased CPI reflects the current inflationary pressure and consumption pattern of people living in the country.
Earlier in the month, the governor of the Central Bank of Nigeria (CBN) Yemi Cardoso restated the apex bank’s resolve to push down inflation in the country and stabilise the economy.
“Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence.
“Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso said during a Monetary Policy Forum 2025 in Abuja.
Prices of goods still high despite drop in inflation – CPPE
Meanwhile, the Centre for the Promotion of Private Enterprise (CPPE) on Tuesday cautioned that a drastic reduction in inflation figures does not equate to a decrease in the overall price level of goods and commodities.
In a statement signed by Dr. Muda Yusuf, the CPPE warned that while the sharp deceleration in inflation should be acknowledged, it must be celebrated with caution, as high prices remain a significant factor affecting the cost of doing business, the cost of living, and poverty levels in the country.
According to the CPPE, “The sharp decline in the headline inflation rate from 34.8% in December 2024 to 24.48% in January 2025, along with the drop in food inflation from 39.8% to 26.08% and the decrease in core inflation from 29.28% to 22.59%, was not unexpected given the revision of the computation base year from 2009 to 2024.
“Additionally, the inflation figures reflect a strong base effect due to the high inflation regime in 2024, which significantly impacted year-on-year inflation outcomes.
“Furthermore, transaction demand in December 2024 was notably high due to festive spending, whereas in January, spending momentum predictably slowed due to reduced disposable incomes following intense expenditures in the previous month. These factors help explain the sharp deceleration in inflation figures for January 2025.
“However, it is crucial to clarify that a drastic reduction in inflation figures does not imply a reduction in price levels. Inflation reduction merely indicates a slowdown in the rate of price increases, not an actual decline in prices. Thus, the sharp drop in inflation should be viewed cautiously, as high prices persist and continue to impact businesses, households, and overall economic well-being.
“Households and businesses remain burdened by high energy costs, the depreciation of the naira, high interest rates, import costs, transportation expenses, and security challenges. It is imperative for the government to recalibrate its strategies to address these critical cost drivers.
“At this time, what businesses and households truly seek is a reduction in overall price levels from the extremely high rates seen in 2024 to a more moderate level in 2025—technically referred to as disinflation.
“The good news, however, is that there are early signs of such reductions in PMS, diesel, certain food items, and pharmaceutical products. It is hoped that this trend will be sustained throughout the year.”
