Economist Paul Alaje has asserted that while the recent inflation rebasing by the National Bureau of Statistics (NBS) may bolster investor confidence, it does little to alter the economic hardships confronting Nigerians, particularly concerning food prices.
“Prior to this adjustment, food inflation stood at approximately 51.8%. However, under the newly calculated figure, food inflation now constitutes only 40% of total inflation,” Alaje remarked during a national television appearance.
He cautioned against misinterpreting the statistical shift as a real-life improvement, emphasizing, “This does not imply that food prices will suddenly drop when you visit the market tomorrow—such an assumption would be misleading. The economic reality for the average Nigerian remains unchanged.”
Alaje further noted that the revised inflation metrics could enhance investor perception. “For potential investors, a lower inflation rate fosters confidence, and at this point, we need all the economic assurance we can get,” he explained.
On Tuesday, the NBS officially rebased the Consumer Price Index (CPI), the standard measure for tracking changes in the cost of goods and services. This update replaces the previous base year of 2009 with 2024 as the new reference point.
As a result, Nigeria’s headline inflation, previously recorded at 34.80% in December 2024, has now been adjusted to 24.48% in January 2025, according to the NBS.
Alaje pointed out another shift in economic measurements, recalling that in 2009, Nigeria defined employment using a 20-hour workweek threshold. However, under the latest criteria, employment is now measured based on a minimum of one hour of work per week.
Highlighting major government policies such as subsidy removal and exchange rate floatation, he stressed the importance of adapting to these shifts. “The most prudent course of action is to implement necessary adjustments,” he advised.
During his 2025 budget presentation last December, President Bola Tinubu projected that Nigeria’s inflation rate would decline to 15% by the end of the year. However, economists including Alaje and Bismarck Rewane have described this target as overly optimistic and unattainable.
