‘Despite 24.48% Rebased Inflation, Price Pressures Persist’

Despite the rebased inflation rate dropping to 24.48 per cent in January from 34.8 per cent in December 2024, analysts caution against celebrating too soon, as price pressures remain a concern.
The National Bureau of Statistics (NBS) recently announced the rebased inflation figures, using 2024 as the new base year. The data revealed a significant decline in food inflation, which fell from 39.8 per cent in December to 26.08 per cent in January, while core inflation dropped from 29.28 per cent to 22.59 per cent.
Director and CEO of the Center for Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stated that the decline in inflation figures was expected due to the updated computation base year, which shifted from 2009 to 2024.
He explained that the sharp deceleration was influenced by the high inflationary trends of 2024, which affected year-on-year comparisons. Additionally, he noted that spending patterns played a role, as transaction volumes were significantly higher in December due to festive activities, whereas January saw lower consumer spending.
“However, it is crucial to understand that a drop in inflation figures does not equate to a reduction in prices. Inflation measures the rate at which prices rise, not a decline in overall price levels,” Yusuf clarified.
He further emphasised that despite the lower inflation rate, the cost of doing business and living expenses remain high. Key economic challenges such as energy costs, naira depreciation, high interest rates, import expenses, transportation costs, and insecurity continue to affect businesses and households.
Yusuf urged the government to recalibrate its strategies to tackle these cost drivers, stressing that what Nigerians truly need is a substantial reduction in price levels—also known as disinflation.
On a positive note, he acknowledged early signs of price reductions in petroleum products, some food items, and pharmaceuticals. “It is hoped that this trajectory will be sustained throughout the year,” he added.
Managing director of Arthur Steven Asset Management Limited and former President of the Chartered Institute of Stockbrokers (CIS), Olatunde Amolegbe, noted that while prices remain significantly high, the decline in inflation figures is largely due to an expansion in the economy’s measurement framework.
“With food inflation, for example, previously unaccounted products have now been included, making the economy appear larger. Any effort to accurately capture economic activity is useful, as it influences macroeconomic indices and impacts people’s lives,” Amolegbe said.