Nigeria’s CPI Inflation Rate Drops to 24.48% in January 2025

Nigeria's headline inflation rate significantly dropped to 24.48% year-on-year in January 2025, compared to the 34.80% recorded in December 2024.  The sharp decrease followed the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS). The CPI base year was updated from 2009 to 2024, reflecting current consumption patterns for a more accurate measurement of inflation. 

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The rebasing exercise which aims to provide a more accurate representation of current inflationary pressures involved updating the reference year (2009 to 2024) and modifying the basket of goods and services used in inflation measurement, ensuring that the figures better reflect current economic conditions and consumer habits. According to Statistician-General Prince Adeyemi Adeniran, this update ensures that the CPI is more reflective of the prevailing economic environment.

Despite the overall decline, food inflation remains a significant concern, standing at 26.08% year-on-year. The persistent high food inflation is driven by lingering effects of subsidy removal and naira devaluation under President Bola Tinubu’s economic reforms.

The rebased CPI is now believed to better reflect updated consumer spending patterns and economic realities. Urban inflation stood at 26.09%, while rural inflation was 22.15%. The food inflation index dropped to 26.08% year-on-year, down from 39.84% in December 2024. Core inflation, which excludes volatile agricultural produce and energy prices, stood at 22.59%.

While the lower inflation figures offer some relief, the cost of living remains high, and inflation continues to impact various sectors. Government policies, including the Central Bank of Nigeria's (CBN) monetary tightening and fiscal interventions, will be crucial in determining future inflation trends.

The Central Bank of Nigeria (CBN), which raised interest rates by 875 basis points in 2024 to curb inflation, is scheduled to hold its first Monetary Policy Committee (MPC) meeting of 2025 this week to determine further measures for economic stability. The outcomes of this meeting are anticipated to influence future inflation trends and economic stability.

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What do you think about the inflation report for January 2025? Are the figures reflecting the reality in your area? Are you now buying things, especially foodstuffs, cheaper? At what percentage drop? Let us know in the comment box.