An economist, Paul Alaje, says the rebased inflation figures from the National Bureau of Statistics (NBS) may bolster investor confidence but do not reflect the economic hardships Nigerians face, particularly soaring food prices.
“Before this announcement, food inflation alone was about 51.8%, but with this new figure, food inflation now accounts for only 40% of total inflation,” Alaje stated on Politics Today on Channels Television.
“That does not mean food prices have improved. That would be misleading—our reality remains unchanged. However, potential investors may feel more confident seeing a lower inflation rate, and that is important.”
On Tuesday, the Bureau rebased the Consumer Price Index (CPI), updating the reference year from 2009 to 2024. As a result, Nigeria’s headline inflation rate changed from 34.80% in December 2024 to 24.48% in January 2025.
Alaje cautioned against misinterpreting the figures. “It would be incorrect to say inflation dropped from 34% to 24%. A real drop would mean lower prices, which we have not seen,” he explained. “The correct term is ‘change’, not ‘drop’.”
He also pointed out that in 2009, Nigeria defined employment as working 20 hours per week, whereas now just one hour per week qualifies.
Citing key government policies, including subsidy removal and the floating of the exchange rate, Alaje emphasised the need for further adjustments.
During his 2025 budget presentation in December, President Bola Tinubu projected a decline in inflation to 15% by 2025. However, economists like Alaje and Bismarck Rewane have described this target as aspirational and unrealistic.