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Nigeria’s headline inflation rate has plummeted to 24.48% year-on-year in January 2025, a dramatic drop from the staggering 34.80% recorded in December 2024. While this development is welcome news, it raises critical questions about its sustainability and the broader economic implications.
The National Bureau of Statistics (NBS), through the Statistician-General of the Federation, Adeyemi Adeniran, attributed this decline to the rebasing of the Consumer Price Index (CPI). The rebasing exercise, aimed at aligning Nigeria’s inflation measurement with global standards, updates the reference year and adjusts the basket of goods and services used to track inflation trends. While this may have contributed to the lower figures, does it necessarily translate to economic relief for the average Nigerian?
Adeniran disclosed during a briefing in Abuja that urban inflation stood at 26.09%, while rural inflation was recorded at 22.15%. The rebased food inflation also saw a decline, registering at 26.08% year-on-year in January compared to the 39.84% in December. Likewise, the core inflation index, which excludes volatile agricultural produce and energy prices, was reported at 22.59% year-on-year.
Despite these figures, economic realities on the ground remain stark. Many Nigerians continue to struggle with high food prices, dwindling purchasing power, and economic uncertainty. Inflationary pressures have persisted in recent years due to various factors, including supply chain disruptions, currency depreciation, and fiscal policy challenges.
Central Bank of Nigeria (CBN) Governor Yemi Cardoso has reaffirmed the apex bank’s commitment to managing inflation and stabilizing the economy.
“Managing disinflation amidst persistent shocks requires robust policies and coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence. Our focus remains on price stability, transitioning to an inflation-targeting framework, and implementing strategies to restore purchasing power and ease economic hardship,” Cardoso stated at the 2025 Monetary Policy Forum in Abuja.
While the recent inflation decline is encouraging, it is imperative for policymakers to ensure that these figures reflect tangible economic improvements for citizens. Addressing structural issues, strengthening monetary policies, and fostering a more stable business environment must remain top priorities if Nigeria is to achieve long-term economic stability.
