Grace Ashiru
Nigeria’s headline inflation rose to 34.80% in December 2024, driven by higher transport costs and increased consumer spending during the holiday season, according to the National Bureau of Statistics (NBS). This marks a slight increase from November’s 34.60%, heightening expectations for another interest rate hike at the upcoming Monetary Policy Committee meeting in February.
Food and transport costs were the primary contributors to inflation in December 2024. Food inflation slightly moderated to 39.84%, down from 39.93% in November 2024.
“The inflation outlook for 2025 is uncertain, especially with the rebasing of the inflation basket,” said Samuel Onyekanmi, an analyst at Norrenberger. Onyekanmi anticipates that inflation will start to ease in the second half of the year, reaching a range of 25% to 27% by the end of 2025.
The National Bureau of Statistics (NBS) recently rebased its calculation of the consumer price index (CPI) and gross domestic product (GDP). The NBS uses the CPI basket to track the average price changes of goods and services commonly consumed by the public. Previously monitoring 740 items, the NBS has now expanded the CPI basket to include 960 items, with 2024 established as the new reference year.
Ayo Andrew Anthony, Head of Price Statistics at the NBS, explained on Thursday during a sensitization workshop that the inclusion of new items was intended to better reflect current consumption patterns. The updated inflation figures, based on the revised price index, are set to be released at the end of January 2025.
The revised data could lead to a decrease in inflation, as the weight of food—representing the largest portion of household spending and making up more than half of the CPI basket—has been reduced to 40.1% from 51.8%.
Olajide Oyadeyi, an economist at Econoday Inc., commented, “The recent rebasing of GDP and reweighting of the CPI are crucial in reflecting the full scope of economic activity. These updates will improve data precision and aid in more informed planning.”
