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As the National Bureau of Statistics (NBS) prepares to unveil Nigeria’s rebased Consumer Price Index (CPI), analysts and investors are keeping a close watch.

The rebasing, which updates the reference year for tracking inflation and adjusts the weightings of goods and services, is expected to improve data accuracy. However, economic analysts caution that the changes may not sustainably impact Nigeria’s inflationary outlook.

The CPI rebasing exercise will shift the base year from 2009 to 2024, reflecting changes in household consumption patterns and economic realities. Additionally, the basket of goods and services tracked will increase from 740 to 960 items, with significant changes in category weightings.

According to Muhammed Jubrin Barde, one of the most notable adjustments is the reduction in the weight assigned to food and non-alcoholic beverages, which will drop from 51.8% to 40.1%. Conversely, weightings for transport, health, and accommodation services will rise, better capturing current spending trends.

Barde is an economist and a politician. He is a former gubernatorial candidate of the People’s Democratic Party (PDP) in Gombe State.

He said that despite the adjustment, food inflation remains a dominant concern in Nigeria, with a staggering 39.84% year-on-year increase as of December 2024.

Factors such as insecurity, foreign exchange depreciation, supply chain disruptions, and climate shocks continue to drive food prices higher.

“The weight reduction for food does not mean that food inflation will no longer be critical,” noted Barde. “It simply means that other factors, such as rising transport and healthcare costs, will now play a more prominent role in the inflation calculation.”

In an opinion he shared, Barde said the rebased CPI is expected to provide a more balanced and comprehensive view of inflation in Nigeria.

He identified the implications to include:

A More Balanced Inflation Picture: The rebasing reflects the evolving spending patterns of Nigerian households. The increase in weight for transport, health, and accommodation services acknowledges the growing importance of non-food expenses. This will provide a more comprehensive and balanced view of inflation.
Potentially Lower Reported Inflation Figures: Since food inflation has been significantly higher than inflation in other categories, reducing its weight could lead to a marginally lower overall inflation figure. However, this does not mean prices are stabilising—only that the composition of inflation will shift.
Better Policy Decision-Making: With more accurate data, policymakers can develop more effective interventions. For instance, if transport and healthcare emerge as stronger inflation drivers post-rebasing, fiscal and monetary policies may need to address infrastructure and medical service costs more aggressively.

While the rebasing is a welcome statistical improvement, Barde warned that it will not address the fundamental drivers of inflation in Nigeria. Volatile foreign exchange rates, subsidy removals, and persistent structural bottlenecks remain key challenges.

“Even with a lower reported inflation rate due to weight adjustments, the cost of living crisis will persist unless underlying economic issues are tackled,” Dr Barde emphasised.

As Nigeria awaits the release of the updated CPI figures, the rebasing exercise should be viewed as a step towards more accurate economic data rather than a solution to inflation. Policymakers and businesses must remain focused on addressing the structural issues driving price increases to achieve lasting economic stability.

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