Rebased inflation rate does not resolve rising cost of living – LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has said that the rebased inflation rate that dropped from 34.8 to 24.48 percent does not resolve rising cost of living but primarily due to a change in measurement rather than a real decline in prices.

Rebasing is a routine statistical exercise designed to provide a more accurate and current snapshot of an economy. It reflects structural changes, accounts for inflation, and incorporates emerging sectors.

Rebasing typically updates the weight of different goods and services in the inflation basket to better reflect current consumption patterns.

According to the LCCI, this difference does not indicate a sharp fall in prices but a revised way of calculating inflation.

Read also: Nigeria’s CPI rebasing: Validating the predictions and exposing the real inflation story

“A lower inflation rate may seem positive, but it does not automatically improve living standards. Prices are still rising, wages remain stagnant, and unemployment is high, keeping real incomes under pressure,” the chamber said in a statement noting that the rebased inflation rate only reflects a different measurement, not an actual drop in prices.

“For most Nigerians, essential costs like food and transportation remain high, meaning living conditions will not improve unless there is a real reduction in the cost of necessities,” LCCI said.

The chamber added that while the rebased inflation rate provides policymakers with a clearer view of economic trends, it does not resolve the rising cost of living.

They therefore urged the government to implement targeted interventions to address inflationary pressures and improve economic stability.

Based on the new inflation report, the LCCI urged the government to adjust economic policies by tackling food inflation, which accounts for over 50 percent of price increases.

“Policies should focus on boosting agricultural productivity, reducing post-harvest losses, and improving transportation and storage infrastructure to ensure food affordability.

They also stated that stabilising the exchange rate is crucial, as naira devaluation has been a major driver of inflation.

“Encouraging local production and reducing reliance on imports can help strengthen the currency and control price surges,” the chamber said while noting that fiscal discipline is also essential, as excessive government borrowing and deficit spending contribute to inflation.

They further said that reducing unnecessary expenditures while prioritising infrastructure and social investments can help manage inflationary pressures.

At the same time, the chamber urged the Central Bank of Nigeria (CBN) to carefully adjust monetary policies, ensuring interest rate decisions strike a balance between controlling inflation and sustaining economic growth.