Nigeria’s inflation surges to 34.80% ahead of rebasing

Consumer prices rose at a faster annual pace in December to 34.80 percent, the last inflation figure calculated using the old methodology.

In the new methodology, the proposed base year for inflation computation is 2024. The year was proposed to capture the structural changes driven by the removal of subsidies on FX and PMS.

Also, the constituents of the inflation basket are expected to expand from 740 to 960.

Read also: Nigeria’s sky-high inflation rate seen falling after data revamp says Bloomberg

The updated 2024 classification system will replace the current 1998 version. This change will increase the number of divisions from 12 to 13.

This was made known at the sensitisation workshop on Gross Domestic Product (GDP) and Consumer Price Index (CPI) rebasing organised by the Nigerian Economic Summit Group and the NBS last week.

Economic analysts argue that the GDP rebasing will yield an exaggerated GDP growth number, and the CPI rebasing will downplay the inflation rate.

“The CPI rebasing framework is disingenuous. A price reference base year put at 2024 and a weight reference period put at 2023, two peak periods of the country’s first ever shock therapy reforms will ensure that aggregate price pressures are not adequately accounted for,” Basil Abia, cofounder Veriv Africa, a data insight company said.

Ayo Andrew, head of price statistics at the NBS revealed that it will release the December consumer price index and another index that puts rebasing into the context this month.

“We would have the December CPI released this month and then the rebased CPI by the end of January,” Andrew said during the panel session.

The inflation report is necessary for making economic decisions including the monetary policy rate.

The Monetary Policy Committee meeting, which is held bi-monthly has been moved to February 17th and 18th, almost three months after the last meeting in November.

Read: Will Nigerians feel projected inflation drop in their pockets?

Nigeria’s monthly inflation, a more accurate measure of current inflation which gives the current situation, dropped to 2.44 percent from 2.638 percent in November.

Food inflation which constitutes more than 50 percent of headline inflation dropped to 39.84 in December from 39.93 percent.

Meanwhile, core inflation on a month-on-month basis, was 2.24 percent in December 2024. It stood at 1.83 percent in November 2024, down by 0.41 percent points.