Rebased CPI: A New Era for Nigeria’s Inflation Tracking

The recent rebasing of Nigeria’s Consumer Price Index by the National Bureau of Statistics marks a crucial update for inflation tracking, which had not occurred in over a decade. The new CPI, launched on February 18, 2025, reflects current economic conditions and consumption patterns, incorporating 934 product varieties within updated classifications. Experts emphasize the importance of this rebasing for accurate economic indicators and effective policy formulation.

Nigeria’s inflation tracking system has entered a new phase following the recent rebasing of its Consumer Price Index (CPI), a crucial statistical measure that tracks changes in prices for various goods and services consumed by households. The National Bureau of Statistics (NBS) has indicated that the rebasing, which had not taken place in over a decade, is essential to accurately reflect current economic conditions. The CPI is frequently used to calculate the headline inflation rate, which is reported monthly and indicates the year-on-year percentage change in the index.

The CPI encompasses several indices, including Urban and Rural National Index, Headline Index, Food Index, Core Index, and others. Experts advocate for rebasing every five years to account for shifting consumption patterns. The NBS has finally conducted the overdue rebasing, with results released by Statistician-General Prince Adeyemi Adeniran on February 18. The updated CPI aims to better capture Nigeria’s economy by integrating new sectors and refining data collection methods.

Adeniran underscored that economic dynamics necessitate adjustments in the CPI. He explained, “As we all know, the economy of any society or country is dynamic. Over time, with innovation and changes in consumption patterns, the structure of the economy begins to change.” This rebasing process involved updating the base year and enhancing methodologies according to global best practices.

Noteworthy improvements include the adoption of the latest version of the Classification of Individual Consumption According to Purpose (COICOP), which now features 13 categories instead of 12. Additionally, the CPI now records 934 product varieties, up from 740. Other updates exclude own-production and gifted items from expenditure calculations, focusing strictly on monetary transactions. The exclusion of these factors aims to present a more accurate reflection of consumer spending.

The new weight reference period is set for 2023 and the price reference period (Base Year) is 2024. Rigorous data collection methods, including structured interviews and Computer-Assisted Personal Interviewing devices, were utilized to ensure data quality. The NBS engaged with various stakeholders during the rebasing process to gather insights and clarify concerns, thereby fostering transparency.

In conclusion, the rebasing of Nigeria’s Consumer Price Index signifies a pivotal step towards more accurate inflation tracking, reflecting contemporary economic realities. The updated methodology and comprehensive stakeholder engagement underscore the NBS’s commitment to enhancing economic data integrity. Moving forward, analysts remain optimistic about the implications of the new CPI figures in shaping effective economic policy and addressing inflation, particularly in critical sectors such as food and transportation.

Original Source: nannews.ng