Victor EzejaCEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has stated that what households and businesses in Nigeria need is a drastic reduction in prices not just inflation rate.
Yusuf stated this while commenting on the January 2025 inflation figures released by the National Bureau of Statistics (NBS) on Tuesday.
Join our WhatsApp ChannelPrime Business Africa had reported that the latest Consumer Price Index (CPI) report released by the NBS showed that the headline inflation rate recorded a significant drop from 34.8% in December 2024, to 24.48% in January 2025.
The CPI report also indicated that the food Inflation rate reduced from 39.8% in December 2024 to 26.08% in January 2025, while core inflation declined from 29.28% to 22.59%.
The drastic reduction, according to economic analysts was due to the recent rebasing of the CPI by Nigerian authorities.
In a statement titled “CPPE Comments on January 2025 Inflation Figures”, Yusuf said that the drastic reduction in the inflation rate in January should be cautiously celebrated.
He said the reduction in the inflation rate did not come as a surprise “given the review of the computation base year from 2009 to 2024.”
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Explaining further the effect of the rebasing exercise on the latest inflation figures, Yusuf stated: “There is additionally a strong base effect on the inflation figures given the high inflation regime in 2024, which had a considerable effect on the year-on-year inflation outcomes.”
He clarified that why the inflation figure hit 34.8% in December was due to high transaction activities because of the festivities, and that the sharp deceleration in January could be attributed to generally low spending witnessed in the first month of the year after heavy spending in the previous month.
The CPPE CEO, however, pointed out that “a drastic reduction in inflation figures is not tantamount to a reduction in price level. Inflation reduction, according to him, “simply means a reduction in the rate of increase in the general price level, not a reduction in price.”
“The drastic deceleration in inflation should therefore be cautiously celebrated,” he warned.
The economic expert observed that high prices still persist and remains a major factor in the cost of doing business, cost of living and poverty equation in the country.
He mentioned that Households and businesses still grapple with high energy costs, weak naira value, high interest rate, cost of imports, transportation costs and insecurity which are major drivers of inflation in the country.
He urged the government to restrategise to address these major causes of high costs.
“It is hoped that the government will recalibrate its strategies to address these major cost drivers.
“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.”
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
