Beyond the numbers: Rethinking inflation in a time of crisis

Nigeria’s recent Consumer Price Index (CPI) rebasing has predictably altered statistical representations of inflation without alleviating the economic realities faced by its citizens. While some may perceive a downward shift in inflation figures as a positive development, a closer analysis reveals a more complex and troubling picture. The latest data from the National Bureau of Statistics (NBS) reports a headline inflation rate of 24.48 percent for January 2025, with food inflation at 26.08 percent and core inflation at 22.59 percent. The recalibration has merely shifted emphasis rather than provided any tangible relief.

 “Nigeria must invest aggressively in domestic food production, eliminate logistical bottlenecks, and stabilise foreign exchange policies that affect agricultural input costs.”

At first glance, the new figures suggest an easing of inflationary pressures—especially compared to December 2024, when food inflation stood at a staggering 39.84 percent. However, this apparent moderation is an illusion. The rebasing exercise adjusted food’s weight in the inflation basket from 51.8 percent to 40.1 percent, effectively diluting its influence in the overall index. Yet, for the average Nigerian, food remains the most significant component of household expenditure. A methodological adjustment does not equate to a real decline in the cost of essential goods.

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Furthermore, core inflation, which excludes volatile food and energy prices, now stands at 22.59 percent, underscoring that inflationary pressures are deeply embedded beyond just food prices. The idea that inflation is being spread among categories rather than being restricted is further supported by the unrelenting rise in housing, transportation, and healthcare prices.

The latest figures expose a growing divide between urban and rural inflation. With urban inflation at 26.09 percent and rural inflation at 22.15 percent, it is evident that cities bear the brunt of rising transportation, rent, and utility costs. If left unaddressed, this divergence could further entrench economic inequalities, forcing lower-income urban dwellers into even greater financial distress. Historically, Nigeria has exhibited a pattern of using technical adjustments as a substitute for substantive policy action. The danger now is that rebased inflation figures could be misused as evidence of progress, diverting attention from the structural reforms required to tackle persistent inflation.

Policymakers must resist the temptation to take solace in revised figures and instead pursue targeted interventions. Nigeria must invest aggressively in domestic food production, eliminate logistical bottlenecks, and stabilise foreign exchange policies that affect agricultural input costs. The country’s reliance on food imports remains a vulnerability, necessitating long-term strategies that prioritise self-sufficiency.

Housing affordability must be addressed through incentives for low-cost housing development. Public transportation infrastructure must be expanded to reduce dependency on expensive private transport options, which contribute significantly to urban inflation. Interest rate policies, fiscal spending, and wage adjustments must reflect the lived experiences of ordinary Nigerians rather than being dictated by statistical recalibrations. Inflation control strategies should be guided by real consumption patterns and price dynamics rather than abstract metrics.

The rebasing of Nigeria’s CPI should not be mistaken for an economic breakthrough. The January 2025 inflation figures confirm that while measurement techniques have evolved, the fundamental crisis remains unchanged. This exercise must not serve as a pretext for complacency among policymakers. Statistical comfort must not overshadow the urgency of real economic reform. The government must avoid falling into the trap of relying on recalibrated indices as a shield against accountability. Nigerians do not need new inflation metrics—they need policies that decisively address the unrelenting cost-of-living crisis. Anything less would be a disservice to a nation struggling under the weight of economic mismanagement.