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Nigeria's Inflation Surges to 23.88% Due to Statistical Change

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  Published in Business and Finance on Wednesday, January 14th 2026 at 14:32 GMT by Bloomberg L.P.
      Locale: NIGERIA

Abuja, Nigeria - Wednesday, January 14th, 2026 - Nigeria's inflation rate is poised for a dramatic surge to 23.88% in January 2026, a figure that initially appears alarming but is primarily attributable to a methodological change by the National Bureau of Statistics (NBS), according to economic experts. This shift, announced Wednesday, involves revising the base year for CPI calculations from 2013 to 2023.

The sudden jump from the previous December's rate of 11.08% has understandably raised eyebrows, but economists are keen to emphasize that it doesn't necessarily signify a sudden worsening of underlying inflationary pressures. Instead, it represents a one-time statistical adjustment designed to provide a more accurate and current representation of the country's price levels.

Understanding the Base Year Revision

CPI, or the Consumer Price Index, is a key indicator used to measure inflation. It tracks changes in the prices of a basket of goods and services purchased by households. To calculate inflation rates, statisticians compare prices over time. This comparison is made against a specific 'base year,' which serves as a reference point. Choosing a relevant base year is crucial because it influences the magnitude of the calculated inflation rate.

Nigeria's last base year revision occurred a decade ago. Given the significant economic shifts that have transpired since 2013 - including currency devaluation, supply chain disruptions spurred by global events, and the controversial removal of fuel subsidies - the NBS's decision to switch to 2023 is intended to enhance the data's accuracy and relevance. The 2023 base year incorporates more recent price data, making the CPI a more reliable barometer of current economic conditions.

Why the Dramatic Increase?

The statistical adjustment inherently inflates the reported inflation rate. Prices that were deemed '100' in 2013 are now re-indexed based on their values in 2023. This re-basing process automatically creates a substantial increase in the calculated CPI, resulting in the jump to 23.88% for January 2026.

As Ayo Teriba, chief economist at Econ Intelligence, succinctly put it, "This isn't about inflation getting worse; it's about the way we measure it changing." He described the change as an "artificial spike," acknowledging that the number itself can be misleading if interpreted as a genuine acceleration of inflationary pressures.

Nigeria's Inflationary Challenges - Beyond the Statistical Adjustment

While the statistical adjustment provides context, it's important to recognize that Nigeria has faced persistent inflationary challenges in recent years. These challenges are rooted in a complex interplay of factors. The significant devaluation of the Nigerian Naira has increased the cost of imported goods, while disruptions to global supply chains, particularly post-pandemic, have exacerbated shortages and driven up prices. The removal of fuel subsidies, a politically sensitive but economically significant reform, also contributed to price increases across various sectors.

In response to these persistent inflationary pressures, the Central Bank of Nigeria (CBN) has implemented a series of interest rate hikes, aiming to cool down the economy and curb price increases. However, the effectiveness of these measures has been a subject of ongoing debate.

Global Context and the Importance of Base Year Revisions

Nigeria's decision to revise its base year isn't an isolated incident. It is a standard practice employed by statistical agencies worldwide. Regularly updating base years ensures that economic data remains relevant and reflective of current economic realities. Without periodic revisions, inflation rates can become distorted and less meaningful over time.

The NBS's move underscores the importance of transparent statistical methodology and clear communication to avoid misinterpretations and ensure policymakers and the public alike have access to accurate economic information. While the initial spike in the inflation rate might trigger concerns, understanding the statistical context is critical for informed analysis and decision-making in Nigeria's evolving economic landscape.