Experts caution against celebration as inflation drops to 24.48%
BY TEMITOPE ADEBAYO
Despite a significant drop in Nigeria’s inflation rate to 24.48 per cent in January, analysts have warned that price pressures persist, dampening any premature celebrations.
The National Bureau of Statistics (NBS) announced the rebased inflation figure, reflecting a shift to 2024 as the new base year. This marks a sharp decline from December 2024’s 34.8 per cent. Food inflation also fell from 39.8 per cent to 26.08 per cent, while core inflation declined from 29.28 per cent to 22.59 per cent.
However, economists argue that the adjustment does not translate to lower prices but merely a slower pace of price increases. Director and Chief Executive of the Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, explained that the decline was expected due to the revision of the base year from 2009 to 2024.
“There is a strong base effect at play given the high inflationary regime in 2024, which significantly influenced year-on-year outcomes,” Yusuf stated. He added that December’s intense spending due to festive activities contrasted sharply with January’s typically weaker consumer demand, further contributing to the slowdown in inflation.
READ ALSO: Grief as Senators Godswill Akpabio, David Mark mourn death of Edwin Clark, Ayo Adebanjo
He cautioned against misinterpreting the figures, stressing that a lower inflation rate does not mean lower prices. “Inflation reduction simply means a slower rate of increase in prices, not a decline in price levels. The reality of high costs remains unchanged, affecting businesses, household budgets, and poverty levels.”
Concerns over energy costs, exchange rate volatility, high interest rates, import costs, and insecurity continue to weigh on businesses and consumers. Yusuf urged the government to recalibrate its policies to address these cost drivers, emphasising the need for disinflation—a meaningful reduction in overall price levels.
“There are early signs of price moderation in petrol, diesel, some food items, and pharmaceuticals. The key is sustaining this trajectory,” he noted.
