Nigeria has rebased its Consumer Price Index (CPI), adjusting it to better reflect current economic realities. This update allows for more accurate tracking of inflation through enhanced categorization and data collection. The CPI now indicates a headline inflation rate of 24.48% as of January 2025, highlighting rising costs in critical sectors. Economists advocate further governmental action to manage inflation, particularly relating to food and transportation costs.
The recent updates to Nigeria’s Consumer Price Index (CPI) reflect significant changes in the nation’s inflation tracking methodology. This statistical measure, which assesses the weighted average prices of goods and services consumed by households, is crucial for understanding inflationary trends. The CPI report, prepared by the National Bureau of Statistics (NBS), undergoes rebasing approximately every five years to account for changing consumption patterns, but the last adjustment was over a decade ago, making this update particularly important.
On February 18, the NBS presented its newly rebased CPI, which incorporates a more accurate reflection of the current economic environment. The Statistician-General, Prince Adeyemi Adeniran, emphasized that rebasing helps capture new sectors, updating consumption baskets and improving data collection methods. The new index categorizes expenditures using the 2018 Classification of Individual Consumption According to Purpose (COICOP), adjusting divisions from 12 to 13, which now encompasses categories like “Insurance and Financial Services.”
The rebased CPI includes 934 product varieties, up from 740, and excludes non-monetary expenditures, thereby enhancing the accuracy of the inflation rate calculations. The new weight reference period is set at 2023, while the price reference period is 2024. Data collection incorporated structured interviews and other credible sources, ensuring high-quality inputs for effective statistical analysis.
The rebased CPI reports a headline inflation rate of 24.48% as of January 2025, a marked increase compared to the previous rate of 29.90% due to rising costs in food and non-alcoholic beverages, restaurants, and transportation. While this indicates a shift in pricing trends, it does not necessarily imply reduced market prices, as government policies aimed at controlling inflation remain in effect.
Economic analysts have lauded the rebasing initiative, acknowledging that accurate inflation tracking is essential for effective policy formulation. They encourage the Nigerian government to address food and transportation costs specifically, as these contribute significantly to overall inflation pressures. Continuous improvement in infrastructure and reducing transportation costs are deemed vital for mitigating inflation closer to manageable levels.
Nigeria’s new inflation figures, derived from the CPI rebasing, reflect the country’s contemporary economic challenges and consumption dynamics. The NBS is optimistic that these changes will facilitate precise price tracking and support data-driven policy development to stimulate the Nigerian economy’s growth.
In conclusion, Nigeria’s recent rebasing of the Consumer Price Index marks a crucial step in accurately assessing and tracking inflation. This update provides a more realistic reflection of current economic conditions, with enhanced categorization and improved data collection methods. Despite highlighting elevated inflation rates, the reforms are expected to aid in formulating better economic policies. The focus remains on addressing high food and transportation costs to alleviate inflationary pressures effectively.
Original Source: nannews.ng
