Nigeria’s headline inflation rate has sharply declined to 24.48%, a significant drop from last month’s 34.80%, following a rebasing exercise to reflect changes in consumption patterns. The new inflation data, released by the National Bureau of Statistics (NBS), is the result of an updated methodology that expanded the basket of goods and services used for calculations from 740 to 960 items, with 2024 as the new benchmark year.
Food Inflation Also Drops After Rebasing
Food inflation, which has been a major driver of overall inflation, also fell to 26.08% from 39.84%, reflecting the impact of the new methodology.
However, the unexpected drop has raised concerns among economic analysts and policymakers, with some questioning the integrity of the data and whether the rebasing artificially reduced inflation figures.
“We need to have a broader conversation about the rebase effect on top-line inflation and whether a statistical reduction is a good thing,” one policy expert told TechCabal.
Concerns Over Timing and NBS Data Integrity
- The inflation data was delayed by three days, marking the first time in decades that Nigeria’s official inflation report was published after the usual 15th of the month deadline.
- The NBS hacking incident in December 2024, which compromised the agency’s systems for nearly a month, has raised concerns about its data integrity and operational transparency.
Implications for Monetary Policy and Interest Rates
The rebased inflation figures could impact the Monetary Policy Committee (MPC), which meets in the next 48 hours. The CBN has set an inflation target of 21%, and with the new figures at 24.48%, policymakers may opt for a softer approach on interest rates.
However, the real impact on everyday Nigerians remains uncertain. Despite the lower inflation figures, many still experience rising prices for essential goods and services.
Coincidence with CBN’s Forex Interventions
- The rebasing and drop in inflation come at a time when the Central Bank of Nigeria (CBN) has aggressively intervened in the foreign exchange market, leading to a strengthened naira.
- Analysts speculate that this move, along with potential interest rate hikes by CBN Governor Yemi Cardoso, could impact the cost of living and business confidence.
Final Thoughts
While the rebased inflation figures present a more optimistic outlook, concerns remain about the timing, credibility, and real economic impact. The coming months will reveal whether Nigerians truly experience relief or if this is merely a statistical adjustment with limited real-world benefits.