While Nigeria’s January 2025 inflation figures show a significant drop, the Centre for the Promotion of Private Enterprise (CPPE) cautions against premature celebrations. The CPPE acknowledges the headline inflation decrease from 34.8% to 24.48%, alongside reductions in food and core inflation, but argues this doesn’t translate to immediate relief for businesses and households.
According to the CPPE Director/CEO, Dr Muda Yusuf, explained that the inflation figures are influenced by a change in the base year for calculation (from 2009 to 2024) and the “base effect” of 2024’s high inflation. He also pointed to the typical post-holiday dip in spending as a contributing factor.
“A drop in the rate of inflation doesn’t mean prices are coming down,” Yusuf emphasized. “Nigerians are still grappling with the same high costs of living and doing business. Energy costs, the exchange rate, interest rates, import costs, and insecurity continue to be major burdens.”
The CPPE is calling on the government to shift its focus from simply managing the inflation rate to actively addressing the underlying causes of high prices. They are advocating for policies that will bring about genuine disinflation—a sustained reduction in the general price level.
While the CPPE sees some positive signs, such as price decreases in fuel, some food items, and pharmaceuticals, they stress the need for consistent and targeted interventions to alleviate the economic pressures facing businesses and households. They are urging a recalibration of government strategies to tackle the root causes of high costs, rather than just focusing on the statistical inflation rate.
