Nigeria’s Inflation Rate Drops to 24.48% After CPI Rebasing – A Major Economic Shift

 Nigeria’s Inflation Rate Drops to 24.48% After CPI Rebasing – A Major Economic Shift

Nigeria’s headline inflation rate has significantly declined to 24.48% in January 2025, following the rebasing of the Consumer Price Index (CPI), according to the National Bureau of Statistics (NBS). This recalibration aims to provide a more accurate representation of current economic trends, reflecting evolving consumer spending patterns and market realities.



Understanding CPI Rebasing: What Changed?

Rebasing the CPI involves updating the basket of goods and services used to measure inflation, ensuring it aligns with contemporary spending habits. The previous base year of 2009 no longer reflected Nigeria’s economic structure, necessitating an update to 2024 as the new reference year.

The rebasing exercise introduced new consumption categories, such as telecommunications, fintech, and digital services, reflecting their growing role in the economy. This adjustment helps in assessing the true impact of inflation on Nigerian households and businesses.

Implications of the New Inflation Figures

The reported 24.48% inflation rate in January 2025 marks a sharp drop from the previous estimate of 34.80% in December 2024. The recalibrated index more accurately weighs goods and services based on current consumer behavior, reducing statistical distortions.




However, despite the overall decline, food inflation remains high at 26.08% year-on-year, indicating persistent price pressures in the food sector. With food prices forming a significant portion of household expenditures, this remains a key concern for economic policymakers.

Macroeconomic Context: Policy Reforms and Market Trends

The rebasing of the CPI comes amid economic reforms spearheaded by President Bola Tinubu’s administration, including:

  • Fuel subsidy removal – A policy aimed at freeing government revenue but leading to an initial spike in inflation.
  • Naira devaluation – Strengthening foreign exchange reserves but increasing import costs.
  • Tighter monetary policies – The Central Bank of Nigeria’s (CBN) measures to stabilize the economy and control inflation.

While these reforms initially contributed to inflationary pressures, the rebased CPI now offers a clearer picture of their long-term impact. The more precise data will enable the CBN’s Monetary Policy Committee (MPC) to make informed interest rate decisions when it meets for the first time in 2025.

Broader Economic Outlook: GDP Rebasing on the Horizon

The NBS has also announced plans to rebase Nigeria’s Gross Domestic Product (GDP), reflecting the emergence of sectors such as:

  • Marine and blue economy
  • Arts, culture, and tourism
  • E-commerce and fintech
  • Information and communication technology (ICT)

Nigeria’s last GDP rebasing in 2014 propelled it to Africa’s largest economy, and another update could provide valuable insights into new growth drivers and investment opportunities.

The rebasing of the CPI is a landmark development that enhances the accuracy and relevance of Nigeria’s economic indicators. With a more comprehensive and representative inflation measurement, policymakers, investors, and businesses can make better-informed decisions to drive sustainable economic growth.

As Nigeria prepares for its upcoming GDP rebasing, the economy stands at a crucial juncture where data-driven policies will shape its trajectory. The recalibrated inflation data now serves as a foundation for improved economic planning, strategic investment, and fiscal policy adjustments in the years ahead.

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