Nigeria Set to Overhaul Inflation Reporting for the First Time in 15 Years

The National Bureau of Statistics (NBS) in Nigeria has revealed that it intends to amend its inflation reporting methods.

This decision comes after worries that the year-on-year inflation figure for December may be artificially elevated, influenced by last year's adjustments to the economic data.

The agency stated that the anticipated surge in December's inflation does not accurately depict genuine price changes in the economy, but is primarily a statistical anomaly resulting from the recent rebasing of the Consumer Price Index.

As reported by Reuters, the current rebasing—which is taking place for the first time in 15 years—has set December 2024 as the new reference point for the index.

According to officials, this change is expected to inflate the year-on-year inflation figure for December without reflecting the true market conditions.

The data for December inflation is due for release on Thursday. Analysts are forecasting a significant increase in the headline inflation rate to roughly 30 percent, up from 14.45 percent noted in November.

Nevertheless, the NBS has cautioned against viewing this projected figure as an authentic representation of inflationary trends.

"The widely circulated figure of 30 percent for December is merely a projection and not official information from our bureau," stated Ayo Anthony, the head of Prices at the NBS.

Anthony remarked that Nigeria’s consumer inflation had reached close to 35 percent in December 2024 but subsequently reduced significantly after the rebasing and a decrease in food prices.

"This surge does not indicate the real inflation rate. It is a fabricated increase stemming from the base effect from rebasing," he clarified.

To rectify this distortion, the statistics agency plans to substitute the one- month index reference period with a 12-month reference frame for 2024 to yield a more precise depiction of inflation.

"We will be replacing the single-month index reference period with a 12-month period for 2024 to ensure accurate reporting of inflation," Anthony explained.

He noted that while other nations like South Africa and Kenya utilize a one- month basis, Nigeria's dynamic price fluctuations render that approach ineffective given its economic situation.

Prior to this update, Nigeria had last updated its inflation data in 2009.

Bonaventure Nwosu, who heads Communications at the NBS, told Reuters that the lengthy interval between rebasing events has intensified the base effect currently being observed.

"Having not rebased in 15 years, some of the observed base effect is attributable to this delay. Any spike seen in December is an isolated case and should not be regarded as the real inflation rate. Starting January 2026, figures will stabilize and accurately reflect market conditions," he stated.

The bureau emphasized that the new methodology would offer a clearer and more trustworthy perspective on inflationary pressures within Africa's most populous nation.