The National Bureau of Statistics (NBS) announced on Monday that Nigeria’s inflation rate has decreased to 23.2% in February, down from 24.48% in January, following the rebasing of the Consumer Price Index (CPI).
According to the NBS, food inflation dropped from 25.18% in January to 23.51% in February. The report attributes the February decline to lower prices in key food items such as beans, maize, and cassava, as well as a 9.2% rise in the cost of food and non-alcoholic beverages.
The NBS also highlighted urban inflation, which stood at 25.15% in February. Earlier this year, the bureau rebased the consumer price index, updating the base year from 2009 to 2024, in a bid to provide more accurate inflation data. The rebasing introduced key changes to the methodology used to calculate inflation, improving the quality of the estimates.
In addition to the CPI rebasing, the NBS introduced several new indices, including the Farm Produce Index, Energy Index, Services Index, Goods Index, and Imported Food Index. The Farm Produce Index rose significantly to 112.46%, up from just 1.77% in January. Meanwhile, the Energy Index stood at 107.43%, marking a decrease of 0.99% from January, while the Imported Food Index climbed to 113.38%, up from 111.47% the previous month.
The NBS report also noted a slight drop in food prices, attributed largely to the influx of grains imported under last year’s import duty waiver program.
Despite the recent dip in inflation, the government’s projection of a 15% inflation rate for 2025 remains a challenging target. Economists have expressed skepticism, citing persistent drivers of inflation, such as high energy costs, insecurity, exchange rate fluctuations, and elevated food prices.
Inflation in Nigeria has been rising steadily over the past four years, peaking in June 2023 with the removal of fuel subsidies and the devaluation of the naira under President Bola Tinubu’s administration. These changes led to a surge in fuel and imported goods prices, contributing to the high cost of living and triggering protests against hunger across the country.
The Central Bank of Nigeria (CBN) has attempted to curb inflation by hiking the Monetary Policy Rate (MPR) multiple times throughout 2024. The MPR rose from 18.75% in February to 27.5% by November, but these interest rate hikes have been met with criticism. Experts argue that the CBN’s strategy, which focuses solely on reducing money circulation, fails to address underlying supply-side issues such as foreign exchange shortages, insecurity, and weak purchasing power.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), has been vocal about the need for the CBN to tackle these broader economic challenges. Similarly, the International Monetary Fund (IMF) has warned that high interest rates could exacerbate inflation rather than mitigate it, a sentiment recently echoed by Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee.
