Oyinpereye Forcados
The National Bureau of Statistics (NBS) has announced a decline in Nigeria’s inflation rate to 24.48% in January 2025, following a rebasing of the Consumer Price Index (CPI). While this statistical shift suggests easing inflation, the reality for many Nigerians remains grim, with high prices, weak purchasing power, and widespread economic struggles.
At a press briefing, the Statistician-General of the Federation, Adeyemi Adeniran, explained that the rebased CPI, which updates the reference year and revises the basket of goods and services, provides a more accurate reflection of economic conditions. The new system reported urban inflation at 26.09% and rural inflation at 22.15%, a significant drop from December 2024’s 34.80% under the old methodology.
Despite these figures, many Nigerians continue to face rising food prices, with food inflation recorded at 26.08%, down from 39.84% in December. Core inflation, which excludes volatile items like food and energy, also dropped to 22.59%. However, these numbers contrast starkly with the experiences of consumers, who struggle with persistent cost-of-living pressures.
CBN’s Next Move: Rate Hike or Relief?
With the inflation rate now appearing lower, attention shifts to the Central Bank of Nigeria (CBN), which is set to hold its Monetary Policy Committee (MPC) meeting on February 19-20. Analysts believe the CBN may pause interest rate hikes or consider a slight reduction to stimulate economic activity.
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For months, the CBN has aggressively raised the Monetary Policy Rate (MPR) to curb inflation, making borrowing costlier. However, with the new inflation data, experts argue that further hikes may not be necessary. Instead, the focus could shift toward policies that address supply-side issues affecting food and energy prices.
Beyond the Numbers: The Real Struggle
Despite statistical improvements, Nigerians continue to grapple with high costs of fuel, electricity, transportation, and food. Business owners face rising operational expenses, while wages remain stagnant. Though the rebased CPI may guide policy decisions, it does little to ease the everyday financial burden on citizens.
As the CBN prepares for its MPC meeting, the real question remains: Will these policies lead to actual relief, or will Nigerians continue to battle economic hardship despite falling inflation on paper?