Despite the decline of Nigeria’s Consumer Prices Index (CPI) to 24.4 per cent in January, the skyrocketing price of food commodities has remained a source of concern for many.
The National Bureau of Statistics (NBS) had yesterday stated that the CPI, which measures the rate of increase in price of goods and services during a particular period, said it replaced the reference period of 2009 in making comparisons on rise in price in commodities to 2024 to keep the country in line with international practices.
While the bureau said the Food inflation also declined to 26.08 per cent from 39.84 percent recorded in December, financial experts have said the inability to curtail the price of these commodities would plunge more Nigerians into poverty.
Speaking with Daily Trust, the Director/CEO, Centre for The Promotion of Private Enterprise (CPPE), Muda Yusuf, said that a drastic reduction in inflation figures is not tantamount to a reduction in price level, noting that inflation reduction simply means a reduction in the rate of increase in the general price level, not a reduction in price.
He said the drastic deceleration in inflation should therefore be cautiously celebrated as the reality of high prices has not changed and remains a major factor in the cost of doing business, cost of living and poverty equation in the country.
He added that households and firms are still concerned about high energy costs, the strength of the naira, high interest rate, cost of imports, transportation costs and insecurity, saying it is hoped that the government will recalibrate its strategies to address these major cost drivers.
He went on to state that what businesses and households desire at this time “Is a reduction in the general price level from the incredibly high levels in 2024 to a substantial moderation in 2025, which is defined in technical parlance as disinflation.
“The good news, however, is that we are beginning to see indications of such reductions in PMS, diesel, some food items and pharmaceutical products. It is hoped that this trajectory will be sustained in the course of the year.”
MPC should pause rate hikes
On his part, a Professor of Capital Market, Prof. Uche Uwaleke, explained that the exercise is primarily meant to reflect current inflationary effects.
He said the benefits of the rebased number would help the government, especially, the monetary authority to make more informed decisions.
“It makes our inflation number comparable with the rest of the world since it is based on standard and updated methodology. This can place both foreign and domestic investors in a stronger position to make investment decisions in favour of Nigeria. Now that the inflation number for January has provided evidence of weakening inflationary pressure, I expect the Monetary Policy Committee of the CBN to pause rate hikes to create room for output growth.”
Government working hard to reduce cost of food, other commodities
Speaking during a press briefing on Tuesday in Abuja, the Statistician of the Federation and the CEO of NBS, Prince Adeyemi Adeniran, while acknowledging that the reduced inflation figure does not translate into a drop in prices of goods and services in the market said the government is working in all angles to ensure that prices of food items come down.
“So, they are working on that. The CBN and other agencies are working to target our inflation rate. Those policies of the government that they have been targeting to reduce inflation rate are still there. Government is still committed to see that food is available to the populace and the purchasing power of our citizens is enhanced. So, it’s not saying prices have come down in the market to this rate. But the rate of change between 2024 January and 2025 January is what the inflation rate is all about.”
While reiterating that the rebasing was free from political interference, he said January’s inflation would still have dropped if the rebasing was not carried out.