The National Bureau of Statistics (NBS) on Monday announced that inflation rate has decreased to 23.2% in February, down from 24.48% in January, following the rebasing of the Consumer Price Index (CPI).
NBS said food inflation moved from 25.18 per cent in January to 23. 51 per cent in February 2025, noting that the February inflation rate was driven by food and non-alcoholic beverages, which rose by 9.2 per cent.
The drop, according to NBS, was due to the drop in the prices of some food items, including beans, maize, cassava, among others.
The NBS report also shows that urban inflation was 25.15 per cent, Earlier this year, the NBS had changed the consumer price index base year from 2009 to 2024, an action it believes will give a more accurate inflation figures.
The rebasing also saw the introduction of some critical methodology changes to improve the computation processes and quality of the estimates.
Another improvement introduced by NBS is the exclusion of own-production, imputed rents, and gifted items from the aggregates used to come up with the weights.
The newly introduced Farm Produce Index, Energy Index, Services Index, Goods Index, and Imported Food Index, show that the farm produce index was 112.46, up from the January rate of 1.77 percent, the energy index in February was 107.43, down from the January rate by 0.99, the services index 114 in February, imported food was 113.38, up from 111.47 in January.
In recent times, prices of food items have experienced a slight drop in prices, caused mainly by the arrival of grains imported during the import duty waiver window last year.
Recall that the government had earlier projected an inflation rate of 15 per cent for 2025, a projection many economists said would be an uphill task given the rate at which prices of goods and services are rising in the country.
This is even more so as the driving factors of inflation, which include high energy costs, insecurity, fluctuation of the exchange rate, as well as high food costs, are still prevalent in the country.
Nigeria has witnessed a consistent rise in headlines and food inflation over the last four years but it reached a cresendo in June 2023 with the removal of fuel subsidies and subsequent floatation of the naira by the new government of President Bola Tinubu.
Prices skyrocketed in response to the increase in the cost of fuel and the cost of imported goods.
Since then, the inflation rate has maintained a steady rise leading to high cost of living and sparking off hunger protests across the country last year.
The Central Bank of Nigeria has tried without much success to force down the galloping inflation by consistently hiking the interest rate, a measure it believed will reduce money in circulation, because it eranoursly believed that the driver of the inflation was too much money in circulation.
Specifically, the CBN raised the Monetary Policy Rate (MPR) consistently in 2024, with hikes in February, March, May, July, September and November. The MPR was increased from 18.75 per cent to 22.75 per cent in February, then to 24.75 per cent in March, 26.25 per cent in May, 26.75 per cent in July, 27.25 per cent in September and 27.5 per cent in November.
Experts have criticised this hike in interest rates, which they say is actually contributing to inflation.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, a strong voice on issues relating to the economy, said the CBN needs to address supply-side issues such as foreign exchange shortages, insecurity, and weak purchasing power, rather than just relying on interest rate hikes.
Even the International Monetary Fund (IMF) at a time cautioned the CBN that its high interest rate policy could actually end up fuelling inflation, rather than curbing it, a position that was recently echoed by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele.
