Economist Dr Justin Amase has cautioned Nigerians against celebrating the reported decline in headline inflation to 14.45 per cent in November, warning that the improvement is largely a statistical illusion driven by changes in methodology rather than real economic relief.
Speaking in an interview with ARISE NEWS on Monday, Amase said the easing inflation figure does not reflect conditions on the ground, stressing that the structural drivers of inflation remain largely unresolved.
“There is a real disconnect between what is going on on the ground and the numbers,” he said.
According to him, the sharp decline follows the rebasing of the Consumer Price Index, which introduced a new base year and significantly altered the weighting of goods and services.
“What essentially happened was a statistical adjustment. A ten per cent decline in inflation overnight is not something you can consider normal,” Amase explained.
He noted that food inflation, which previously carried a 52 per cent weight, was reduced to 40 per cent, while services such as restaurants and hospitality were increased from 1.2 per cent to nearly 10 per cent. The inflation basket was also expanded from 740 items to about 960, reflecting updated consumption patterns.
“You cannot compare the numbers we are having now with those of last year because the methodology has changed significantly,” he said.
Amase acknowledged that recent reforms, including exchange-rate adjustments and tighter monetary policy, have helped stabilise the naira, largely due to increased reserves and renewed investor confidence.
“The stability of the exchange rate has been achieved through reserve build-up, improved confidence and interest-rate hikes that attracted portfolio investment,” he said.
However, he stressed that Nigeria’s inflation problem is fundamentally structural, driven by supply-side constraints such as insecurity, high energy and transport costs, weak infrastructure, low productivity and over-dependence on imports.
“We cannot expect a reprieve now because the economy is structurally shallow. There is no diversification and productivity is low,” Amase said.
He warned that average Nigerians are unlikely to feel any immediate relief, even as official figures show a downward trend.
“The average Nigerian cannot feel the impact. Even the NBS acknowledged that declining inflation figures do not mean inflation itself is falling,” he said.
Amase pointed out that food inflation and service-sector prices, including healthcare, continue to rise in real terms, reinforcing the pressure on household incomes.
“If you look at the November report, food inflation actually increased, and service prices are rising month on month,” he added.
Despite his caution, Amase said the rebasing exercise remains important, as it helps policymakers identify priority areas for intervention.
“The rebasing was essential. It allows government and the Central Bank to see where to intervene to stimulate growth and recovery,” he said.
He identified insecurity, infrastructure, energy pricing and exchange-rate stability as key areas requiring sustained policy action, noting that reforms take time to deliver tangible benefits.
“Economic policy does not work instantly. The effects of subsidy removal and exchange-rate reforms need time to wear out before positive outcomes emerge,” Amase concluded.
Boluwatife Enome
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