The recent news of Nigeria’s rebased Consumer Price Index (CPI) may have relieved the government. Still, it does little to address the harsh realities average Nigerians face as they strive to cope with an economy that is on a tailspin. While a lower inflation rate of 24.4 per cent may seem like progress on paper, the daily struggles of ordinary citizens paint a bleak picture indeed.
With methodological adjustment, inflation has seemingly dropped from a harrowing 34.8 per cent to a more palatable 24.5 per cent as envisaged by the government. This transformation, executed by the National Bureau of Statistics (NBS), might tempt one to believe that Nigeria’s inflationary inferno has been doused to a simmering flame. But before anyone breaks into applause, it is worth asking: Has the economy truly changed, or have we changed how we measure it?
It is essential to acknowledge that the CPI is a crucial indicator of economic health, as it measures changes in the prices consumers pay for goods and services. However, it is equally important to recognise that this data is just one piece of the puzzle when it comes to assessing the well-being of a nation and its people.
For the record, rebasing CPI is not a sinister act or statistical manipulation. It is a standard economic practice meant to reflect contemporary consumption patterns. Nigeria’s previous CPI calculations were tethered to an outdated economic reality, much like attempting to measure today’s cost of living using the prices of yesteryears.
The new base year, 2023, ensures that the index captures shifts in household spending, technological advancements, and the evolving structure of the economy. However, while rebasing provides a more accurate picture, it does not alter the fundamental drivers of inflation. If anything, it merely adjusts the lens through which we view the problem.
If the CPI rebasing offers a new perspective on inflation, the upcoming Gross Domestic Product (GDP) rebasing promises to reshape the understanding of the economy. The last such exercise, conducted in 2014, famously catapulted Nigeria ahead of South Africa as the continent’s largest economy. This was not because of a sudden industrial boom or an influx of foreign investment but because sectors like Nollywood and telecommunications were properly accounted for in the national output.
This exercise, while necessary, raises some important questions. A larger GDP often serves as a morale booster, convincing investors and policymakers that the economy is more robust than previously thought. However, it also comes with inconvenient realities. A bigger GDP means debt-to-GDP ratios will appear smaller, providing the government with ammunition to justify more borrowing. At the same time, social welfare benchmarks may be adjusted, potentially leading to the argument that fewer Nigerians qualify for economic assistance. As always, statistics are a double-edged sword: they can reveal progress, but they can also be used to mask underlying distress.
In Nigeria, the high cost of living, rising unemployment rates, and widespread poverty continue to plague the population. The rebased CPI may give the illusion of improvement, but it does not address the root causes of these pressing issues. The government must look beyond these numbers and take meaningful action to improve the lives of its citizens.
One of the key ways the government can make a real difference is by implementing policies that promote economic growth and create opportunities for all Nigerians. This includes investing in education and skills training programmes, supporting small businesses, and encouraging job creation in diverse sectors of the economy.
Furthermore, the government must prioritise social welfare programmes that assist those most in need. This includes initiatives to combat hunger, improve healthcare access, and support vulnerable populations such as the elderly and disabled.
Nigeria does not need better statistical models to fix inflation—it needs better policies. First, food security must be treated as an urgent national priority. Rising food prices contribute significantly to Nigeria’s inflationary pressure. Second, energy policy must move beyond rhetoric. The cost of power is one of the biggest drags on business competitiveness. Lastly, fiscal prudence is non-negotiable. An equal commitment to efficiency must match the government’s appetite for borrowing.
Nigeria’s latest statistical recalibration offers a fresh perspective on inflation and GDP but does not alter economic reality. The rebased CPI may suggest that inflation has fallen, but the average Nigerian’s cost of living remains punishingly high.
The rebased CPI is just a tiny piece of Nigeria’s larger economic puzzle. While it may be a positive step in the right direction, the government must take concrete action to address its citizens’ deep-seated challenges.
In suggesting this policy option, we are persuaded to argue that the process must be devoid of political expediency because there is nothing as self-defeatist as playing games with the welfare of the people. In the final analysis, the stark reality will always be glaring. All these rebasing gimmicks are like drowning one’s problem in alcohol. Soon, it will be known to be a waste of time.
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
