The Lagos Chamber of Commerce and Industry (LCCI) has pointed out that the decline in inflation is not because of a reduction in the prices of items but a result of the new CPI calculation method, which reflects current consumption patterns.
The chamber emphasised that despite the lower reported inflation rate, high living costs persist, with essential expenses such as food and transportation remaining elevated.
“The drop in inflation from 34.8 per cent to 24.48 per cent is due to a change in measurement rather than a real price decline. The previous method likely overemphasised food inflation, while the new approach incorporates updated economic data and adjusted weightings,” the LCCI stated in reaction to the latest Consumer Price Index (CPI) report of the National Bureau of Statistics (NBS), which showed a sharp decline in Nigeria’s inflation rate due to a change in measurement methodology.
The NBS report shows Nigeria’s inflation rate fell to 24.48 per cent in January 2025 following the rebasing of the CPI, compared to 34.80 per cent recorded under the previous methodology in December 2024.
The revised figures also indicate that food inflation stood at 26.08 per cent year-on-year in January 2025, a significant drop from 39.84 per cent in the previous month. Urban inflation was reported at 26.09 per cent, while rural inflation stood at 22.15 per cent.
The chamber warned that while a lower inflation rate may appear beneficial, it does not automatically translate to improved living conditions, as wages remain stagnant, unemployment continues to be a concern, and real incomes are under pressure.
To address inflationary challenges, the LCCI called on the government to prioritize policies that boost agricultural productivity, stabilize the exchange rate, reduce reliance on imports, and maintain fiscal discipline.
“One key priority is tackling food inflation, which accounts for over 50% of price increases. Policies should focus on boosting agricultural productivity, reducing post-harvest losses, and improving transportation and storage infrastructure to ensure food affordability,” the LCCI advised.
Additionally, the chamber urged the Central Bank of Nigeria (CBN) to carefully adjust monetary policies to balance inflation control with economic growth. “At the same time, the CBN must ensure that interest rate decisions strike a balance between controlling inflation and sustaining economic growth,” it concluded.
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