- Nigeria's National Bureau of Statistics (NBS) reported a sharp decline in the country's inflation rate to 24.48% in January 2025
- Commercio Partners closely predicted the impact of the CPI rebasing, estimating inflation would fall between 15% and 20%
- It should be noted that several other financial and economic analysts and organisations overestimated it at 28% to 33%
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
In January 2025, Nigeria's National Bureau of Statistics (NBS) reported a significant decline in the country's headline inflation rate to 24.48% year-on-year, a substantial drop from the 34.80% recorded in December 2024.
This decrease followed the rebasing of the Consumer Price Index (CPI), an exercise aimed at updating the basket of goods and services to better reflect current consumption patterns and economic realities.
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Amidst various projections from financial analysts, Lagos-based investment firm Commercio Partners stood out with its notably accurate forecast.
Prior to the NBS' announcement, Commercio Partners had projected that, following the CPI rebasing, Nigeria's inflation rate would range between 15% and 20% in their base-case scenario for 2025, with a midpoint estimate of 17.5%.
This prediction was in stark contrast to other firms' forecasts, which estimated inflation rates between 28% and 33%.
The rebasing of the CPI involved updating the base year and revising the basket of goods and services to align with current consumer spending habits and economic conditions.
This methodological change was anticipated to result in a lower inflation figure, as the new base year would reflect more recent price levels, thereby providing a more accurate measure of price changes over time.
Commercio Partners' forecast was grounded in a comprehensive analysis of Nigeria's macroeconomic environment. The firm considered factors such as exchange rate stabilization, fiscal policies, and the anticipated impact of the CPI rebasing.
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Their projection suggested a gradual decline in inflationary pressures, with expectations that inflation would ease to between 20% and 25% in the absence of strong catalysts.
Commercio Partners stated that the CPI adjustment and reduced weightings for key drivers support expectations of declining inflation in 2025.
The report stated:
"With no immediate catalyst for a significant inflation spike in 2025, this statistical adjustment aligns with expectations of declining inflation trends. Additionally, the reduced weightings for key inflation drivers, particularly food and energy, reinforces the likelihood of a substantial drop in inflation."
The accuracy of Commercio Partners' prediction highlights the importance of nuanced economic analysis, especially during periods of significant methodological changes like the CPI rebasing.
Their ability to closely estimate the post-rebasing inflation rate underscores their deep understanding of Nigeria's economic landscape and the factors influencing price stability.
In contrast, other firms' forecasts, which ranged between 28% and 33%, did not account for the full impact of the CPI rebasing, leading to overestimations.
This discrepancy emphasizes the critical need for analysts to incorporate methodological changes and current economic conditions into their models to produce accurate forecasts.
The NBS's rebasing of the CPI and the subsequent reporting of a 24.48% inflation rate for January 2025 mark a pivotal moment in Nigeria's economic assessment.
It not only provides a more accurate reflection of the country's economic conditions but also serves as a testament to the value of informed and context-aware economic forecasting, as demonstrated by Commercio Partners.
Commercio Partners predicts naira to dollar exchange rate
In related news, Legit.ng reported that Comercio Partners projected that the naira would close at N1,700 per dollar in the first half of 2025.
The firm made this prediction in its 2025 Macro Economic Outlook report, titled "Looking Forward to the Future."
The firm stated that the current appreciation of the naira was due to Eurobond issuance, adding that the depreciation of the naira remained inevitable.
