Food Prices Still High But Rebased Inflation Good For Investors
An economist, Paul Alaje, says the rebased inflation by the National Bureau of Statistics (NBS) is good for investors’ confidence but has not changed the economic realities, including high food prices that Nigerians grapple with. “Before this announcement, food inflation alone was about 51.8%, but in this new figure, food inflation of the total inflation now accounts for only 40%,” he said on Channels Television’s Politics Today programme on Tuesday. “That does not mean that if you go to the market tomorrow that the price of food has improved, that will be a lie, our reality remains the same. “Also, people who want to invest in our country, perhaps when they see a reduced inflation rate, will have confidence, and we need this.” Vendors wait for costumers by their fish stalls at the Lokoja International Market in Lokoja on October 21, 2024. (Photo by OLYMPIA DE MAISMONT / AFP) On Tuesday, the Bureau rebased the Consumer Price Index (CPI), which measures the rate of change in prices of goods and services. By rebasing the CPI, the Bureau updated the reference year used to gauge price levels from 2009 to 2024. By implication, the NBS said Nigeria’s headline inflation changed from 34.80% recorded in December 2024 to 24.48% in January 2025. A vendor counts her money as a girls looks on at the Lokoja International Market in Lokoja on October 21, 2024. (Photo by OLYMPIA DE MAISMONT / AFP) Alaje said, “It will be wrong for people to say inflation dropped from 34 to 24%. That will be a wrong narrative. If it drops, we should see the reflection in prices, but that is not what we have seen.” The economist said the right word to use is ‘change’ and not ‘drop’. “What the Bureau of Statistics has done today is not to say that inflation dropped. The Bureau is saying: ‘we are no longer going to reference 2009 as the base year; we will now start reference 2024’,” he said. Alaje, in 2009, Nigeria used 20 hours per week as an employment measure, but now the country uses one hour per week as a gauge for employment. He cited two key decisions of the government – subsidy removal and floatation of the forex rates and noted that “the wisest thing to do is to make the necessary adjustment”. During his 2025 budget presentation last December, President Bola Tinubu expressed optimism that Nigeria’s inflation rate would decline from to 15% in 2025 but economists like Alaje and Bismarck Rewane termed the president’s goal as aspirational and unrealistic.
Admin | 2025-02-19 05:43:45