By Ayomide Otitoju
The National Bureau of Statistics (NBS) has announced plans to publish two separate inflation figures for December following significant changes to its consumer price index (CPI) methodology that caused the headline inflation rate to spike.
According to a Bloomberg report, the decision follows the recent rebasing of Nigeria’s CPI, which introduced methodological adjustments that more than doubled the December inflation reading.
Nigeria’s inflation figures are closely watched by the Central Bank of Nigeria (CBN), particularly as the apex bank transitions toward an inflation-targeting monetary policy framework. The CBN has already incorporated the CPI rebasing and related computational challenges into its three-year inflation forecast and is targeting a moderation in inflation to about 13 per cent by next year, despite prevailing price pressures.
Sources cited by Bloomberg said the inflation data, scheduled for release on January 15, are expected to show an “artificially spiked” inflation rate of 31.2 per cent for December, compared with 14.5 per cent recorded in November.
The Statistician-General of the Federation, Prince Adeyemi Adeniran, said the NBS would take the unusual step of publishing two inflation figures in the interest of transparency. He explained that one figure would reflect underlying economic fundamentals, while the other would capture the inflated outcome resulting from the rebasing methodology.
Similarly, the Head of Price Statistics at the NBS, Ayo Andrew, disclosed that the agency may revise its monthly inflation figures to address distortions arising from the methodological changes. He attributed the issue largely to how the new base period was computed.
“The lesson is to have timely rebasing to avoid such errors,” Adeniran said, adding that the spike does not reflect economic realities but rather arithmetic and base effects. “It is not something unexpected or unusual. Base effects are common.”
Andrew noted that the long delay in updating the CPI basket and the significant expansion in the number of items included contributed to the distortion observed in the December figure.
In 2024, the NBS rebased Nigeria’s CPI for the first time in 16 years, shifting the reference year to 2024. Unlike previous exercises that used a single month as the base period, the latest rebasing was calculated using the average of all months in 2024. The process also involved reweighting several categories and expanding the inflation basket to 934 items from 740.
Adeniran reiterated that the inflation spike does not reflect Nigeria’s economic fundamentals but is driven by statistical and arithmetic factors, stressing that more frequent and timely rebasing would help prevent similar distortions in the future.
