Nigeria’s inflation rate has seen a notable decline, falling to 24.48% year-on-year in January 2025, marking a sharp drop from the 34.80% recorded in December 2024.
According to the latest report from the National Bureau of Statistics (NBS), this significant reduction in inflation highlights a positive shift in the country’s economic landscape. The Statistician-General of the Federation, Adeyemi Adeniran, made this announcement during a press briefing in Abuja on Tuesday.
Adeniran emphasized that the Consumer Price Index (CPI), which tracks the price changes of goods and services, dropped substantially, reflecting an overall easing in inflationary pressures.
The CPI decline was largely attributed to a reduction in the general price levels across different sectors of the economy when compared to the previous month’s figures, which were based on the older inflation measuring template.
Breaking down the figures further, the urban inflation rate stood at 26.09%, while rural inflation came in lower at 22.15%. This disparity indicates that urban areas experienced slightly higher price increases than rural areas in the same period.
A key change in the way inflation is now measured is the rebasing of the CPI, which essentially means updating the reference year and adjusting the basket of goods and services used to gauge price levels.
This adjustment ensures that inflation data better reflects the current consumption patterns of Nigerians and provides a more accurate representation of the country’s economic situation.
In terms of food inflation, which remains a critical concern for many Nigerians, the rebased figures show a decrease, with food inflation dropping to 26.08% in January, down from 39.84% in December 2024.
According to the NBS, this decrease is a positive sign for households, as it suggests a moderation in the rising cost of food items.
Additionally, the rebased core inflation index, which excludes volatile items such as agricultural produce and energy, recorded a year-on-year rate of 22.59%. This also points to a slowdown in the price increases for goods and services in sectors not directly affected by seasonal changes or energy price fluctuations.
The NBS further explained that the rebased CPI now reflects the latest inflationary pressures and consumption patterns of the Nigerian population, providing a more accurate picture of the country’s economic health. The adjustments in the CPI are expected to enhance policy decisions and improve the effectiveness of government measures aimed at stabilizing prices and ensuring economic stability.
This development is a welcome change, signaling that inflationary trends may be easing, offering hope for economic recovery in the coming months. The decline in inflation could also positively impact consumer purchasing power, potentially alleviating some of the financial pressures faced by Nigerians.
