Following the new inflation figures presented by the National Bureau of Statistics (NBS), an economist, Paul Alaje, has commented that while the figure does not reflect the economic realities being faced by Nigerians, the rebased inflation is good for investors’ confidence.
He said this on the Channels Television Programme on Tuesday.
According to him, food prices remain the same despite the new figure. He said:
“Before this announcement, food inflation alone was about 51.8%, but in this new figure, food inflation of the total inflation now accounts for only 40%.
“That does not mean that if you go to the market tomorrow that the price of food has improved, that will be a lie, our reality remains the same.
“Also, people who want to invest in our country, perhaps when they see a reduced inflation rate, will have confidence, and we need this.”
On Tuesday, the Bureau rebased the Consumer Price Index (CPI), which measures the rate of change in prices of goods and services. By rebasing the CPI, the Bureau updated the reference year used to gauge price levels from 2009 to 2024.
By implication, the NBS said Nigeria’s headline inflation changed from 34.80% recorded in December 2024 to 24.48% in January 2025.
Alaje said, “It will be wrong for people to say inflation dropped from 34 to 24%. That will be a wrong narrative. If it drops, we should see the reflection in prices, but that is not what we have seen.”
The economist said the right word to use is ‘change’ and not ‘drop’.
“What the Bureau of Statistics has done today is not to say that inflation dropped. The Bureau is saying: ‘we are no longer going to reference 2009 as the base year; we will now start to reference 2024’,” he said.
Alaje said in 2009, Nigeria used 20 hours per week as an employment measure, but now the country uses one hour per week as a gauge for employment.
He cited two key decisions of the government – subsidy removal and floatation of the forex rates and noted that “the wisest thing to do is to make the necessary adjustment”.
During his 2025 budget presentation last December, President Bola Tinubu expressed optimism that Nigeria’s inflation rate would decline from to 15% in 2025 but economists like Alaje and Bismarck Rewane termed the president’s goal as aspirational and unrealistic.
Comments from Netizens show that while some food prices have reduced to a certain rate, other staple food commodities like rice and flour still remain high and this affects the prices of its refined products such as bread.
