Experts Explain Why Lower Inflation Doesn’t Mean Cheaper Prices
Economists say slower inflation does not mean lower prices, urging focus on affordability, productivity and stronger household purchasing power.
A slight drop in Nigeria’s inflation rate does not mean the prices of goods and services are falling, according to leading economic experts.
The experts cautioned Nigerians against confusing lower Nigeria’s inflation rate with cheaper living costs, explaining that inflation measures how quickly prices rise rather than the actual prices consumers pay. While the latest figures have raised optimism among policymakers, businesses and investors, they stressed that many households continue to face high costs for food prices, transport, rent, electricity, healthcare and education.
Chief Consultant at B. Adedipe Associates Limited, Dr Biodun Adedipe, said public understanding of inflation remains limited. “Drop in inflation rate is not the same as drop in prices. This development means that our energy should focus on availability and affordability, the first two keys of food security. Later, we work on the other two keys — quality and sustainability,” he said.
In a separate analysis titled “Today’s Headline Inflation: Progress or Statistical Illusion?”, Dr Ayinde O. Ayinde of Covenant University explained that Nigeria’s inflation rate reflects the pace of price increases rather than the prices themselves. He noted that genuine economic progress should be measured by whether households can buy more with their incomes and whether businesses face lower production costs.
The economists also argued that Nigeria’s inflation remains driven mainly by structural challenges, including insecurity affecting farming, poor infrastructure, rising transport costs, exchange-rate volatility and supply chain disruptions. They said lasting progress will require reforms that improve productivity, expand domestic production and strengthen economic stability.
Suleyman Ndanusa, an Adjunct Professor at NISER, added that slower inflation only improves affordability when it is supported by higher incomes, lower production costs and stronger supply-side reforms.
The experts urged policymakers to strengthen cooperation on fiscal and monetary policies, invest more in agriculture and infrastructure, improve logistics, and create jobs that raise incomes. They maintained that until families experience lower living costs, any decline in Nigeria’s inflation rate will remain more visible in economic data than in everyday life.
Do you think Nigerians are beginning to feel any real relief from the rising cost of living?
