Despite a statistical decline in Nigeria’s inflation rate following the rebasing of the Consumer Price Index (CPI), the reality on the ground tells a different story—millions of Nigerians continue to battle skyrocketing prices that have eroded purchasing power and household incomes.
Thank you for reading this post, don't forget to subscribe!The National Bureau of Statistics (NBS) recently announced that inflation fell to 24.48% year-on-year in January, compared to 34.80% in December under the previous methodology. However, this statistical adjustment does not mean goods and services have become more affordable. Instead, it reflects a change in the base year from 2009 to 2024, making the new calculations more reflective of current consumer patterns.
Nigerians Still Struggling with Rising Costs
For the average Nigerian, the rebasing of inflation has done little to ease the cost-of-living crisis. Food, transportation, rent, and essential commodities remain at record highs, forcing many to cut back on basic needs. The revised inflation figures might suggest a slowdown, but prices remain painfully high, making it increasingly difficult for salaries and wages to keep pace.
A market survey shows that staple food prices have more than doubled over the past year, with the price of a bag of rice jumping from ₦30,000 to over ₦70,000, while garri, beans, and other essentials have seen similar hikes. Even with the rebased figures, food inflation remains high at 26.08% in January, down from 39.84% in December under the old method.
Similarly, the core inflation index, which excludes volatile items like food and energy, stood at 22.59% in January, compared to 29.28% in December. Urban residents continue to bear the brunt, with urban inflation recorded at 26.09%, while rural areas face 22.15% inflation—both significantly affecting disposable incomes.
What the CPI Rebasing Means for Nigerians
The rebasing of the Consumer Price Index (CPI) was a necessary adjustment, according to the Statistician-General of the Federation (SGF) and NBS Chief Executive, Adeyemi Adeniran. It updates the methodology to better capture today’s spending habits by replacing outdated items in the inflation basket.
However, the NBS acknowledged that this change does not mean prices have fallen, but rather that they are now being measured using a more recent reference point.
“Unlike in the past, where the base year was 2009, the base year for the rebased CPI is 2024. This means we are comparing prices in 2025 with prices in 2024 instead of 2009. Also, the CPI baskets are not the same,” the NBS clarified.
Income vs. Inflation: A Widening Gap
While inflation may have statistically declined, wages have not kept pace, leaving many Nigerians worse off. A recent analysis shows that minimum wage remains stagnant at ₦30,000, while the cost of living has surged by over 100% in many areas. Workers and small business owners continue to struggle to afford daily essentials, with many turning to loans and informal credit schemes to survive.
Economic experts warn that without a significant increase in income levels and stronger economic policies, Nigerians will continue to experience declining purchasing power. The rebasing may provide a more accurate inflation measurement, but it does not change the harsh reality of persistent high costs.
Policy Implications and the Way Forward
With inflationary pressures still a major concern, policymakers face mounting pressure to address rising costs. The NBS emphasized that the rebasing exercise was done in line with global best practices, ensuring that Nigeria’s inflation data aligns with international standards.
However, the real question remains: How will this affect everyday Nigerians? Unless policies are put in place to boost wages, improve food security, and stabilize the naira, Nigerians will continue to struggle under the weight of high inflation.
Adeniran reaffirmed the importance of timely and accurate data to help the government make better economic decisions.
“If Nigeria is to make the desired progress and development, it is imperative that NBS plays its role adequately in providing accurate and reliable statistics to inform all users,” he stated.
Conclusion
While the rebased inflation figures suggest a lower rate, the reality remains unchanged for millions of Nigerians who are struggling to afford basic necessities. Until there is a tangible reduction in the cost of living and an increase in income levels, the rebasing will remain a statistical exercise with little real-life impact on purchasing power.
