According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate climbed to 34.80% in December 2024, driven by increased food prices and consumer spending during the holiday season. This marks a slight increase from the 34.60% reported in November and raises the prospect of another interest rate hike at the upcoming Monetary Policy Committee (MPC) meeting in February.
The key contributors to the inflation spike were food and transport expenses. While food inflation eased marginally from 39.93% in November to 39.84% in December, it remains a significant factor in the overall inflation rate.
“The outlook for inflation in 2025 is tricky, especially with the recent rebasing of the inflation basket,” said Samuel Onyekanmi, an analyst at Norrenberger. He projects that inflation will begin to moderate by the second half of 2025, potentially slowing to a range of 25% to 27% by year-end.
The NBS has updated its methodology for calculating inflation and GDP to better reflect the reality of the current economy. The Consumer Price Index (CPI) basket, which measures the average price changes in goods and services consumed daily, was expanded from 740 items to 960.
According to Ayo Andrew Anthony, Head of Price Statistics at the NBS, the changes aim to capture contemporary consumption patterns more accurately. New inflation figures based on the updated CPI basket will be released at the end of January 2025.
Economists have welcomed the rebasing of the CPI and GDP as a step toward more precise economic data. “The recent GDP rebasing and CPI reweighting are significant steps forward in capturing the true breadth of economic activity. These adjustments should enhance data accuracy and support more effective planning,” noted Olajide Oyadeyi, an economist at Econoday Inc.
