Nigeria’s inflation rate dropped massively to 24.48 percent in January 2024 from 34.80 percent in December last year after the rebased Consumer Price Index.

The Statistician General, Prince Adeyemi Adeniran, disclosed this on Tuesday in Abuja at the launch of the rebased CPI report.

Nigeria’s inflation rose to 34.80 percent in January 2025 compared to 34.80 percent recorded in December last year.
The National Bureau of Statistics disclosed its rebased Consumer Price Index for January released on Monday.

He said the Consumer Price Index (CPI) – which measures the rate of change in prices of goods and commodities – has declined to 24.48 per cent year on year in January.

Adeniran explained that urban inflation stood at 26.09 percent while rural inflation came to 22.15 percent.

Accordingly, the report, food inflation declined to 26.08 percent in January, from 39.84 percent in December 2024.

In a statement on the X account, NBS said, “The National Bureau of Statistics has released the rebased Consumer Price Index (CPI), reflecting an updated price reference period (base year) of 2024 and a weight reference period of 2023.

“Nigeria’s inflation rate for January 2024 stood at 24.48 percent year on year.

“The food inflation rate stood at 26.08 percent; the core inflation rate stood at 22.59 percent; the urban inflation rate stood at 26.09 percent; and the rural inflation rate stood at 22.15 percent “.

This comes as the Central Bank of Nigeria Monetary Policy Committee would hold its first meeting in 2025 on February 19 and 20, 2025.

In November 2024, MPC raised interest to 27.50 percent to bring down inflation.

Johnvents, a Nigerian agribusiness and manufacturing firm, has gained $40.5 million from the UK’s development finance institution to more than double its cocoa processing capacity to 30,000 metric tons annually.

Cocoa is among the biggest non-oil exports in Nigeria and largely grown by small-scale farmers in the south of the country.

Benson Adenuga, head of British International Investment’s (BII) office in Nigeria, said the institution was providing long-term funding for the firm’s plant in Ondo state.

” We’re actually providing funding for them to acquire machines and refurbish and expand their factory,” Adenuga told Reuters. Johnvents exports processed cocoa butter and powder, including to Europe.

Adenuga said BII would also help the firm to have 90% of its cocoa certified under the Rainforest Alliance sustainability and traceability programme by 2027.

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, says that the country’s foreign reserves had exceeded $40 billion .

Foreign reserves play a vital role in maintaining economic stability, supporting monetary policy, and ensuring a country’s ability to participate in international trade and finance.

Governor Cardoso attributes the growth in the foreign reserves to the adoption of an electronic matching system to improve transparency in the market and the introduction of a foreign exchange code of ethics, which all Nigerian banks signed to ensure adherence to market rules.

He made the disclosure on the sideline of the just-concluded inaugural Conference on Emerging Markets Economies organised by the Ministry of Finance, Saudi Arabia, and the International Monetary Fund (IMF) Regional Office in Riyadh.

Cardoso acknowledged that Nigeria had faced significant economic challenges, including capital flow exits, multiple exchange rate regimes, currency depreciation, high inflation, and a backlog of foreign exchange transactions, which led to a loss of confidence in the country’s currency.

The CBN Governor cited reforms in the financial markets that addressed distortions in the Nigerian foreign exchange market, which had previously experienced a gap of up to 60% between the official and parallel market exchange rates.

He noted that due to consistent policy direction, improved market confidence, and enhanced transparency in forex trading, the gap has significantly narrowed to approximately 4-5%.

Importance of Foreign Reserves

Foreign reserves, also known as foreign exchange reserves, are a crucial component of a country’s economic stability and financial security.

Here are the key importance of foreign reserves:

1. Maintains Exchange Rate StabilityForeign reserves help maintain a stable exchange rate by providing a buffer against fluctuations in the foreign exchange market.

2. Ensures Import PaymentsForeign reserves enable a country to pay for imports, ensuring a steady supply of essential goods and services.

3. Supports Monetary PolicyCentral banks use foreign reserves to implement monetary policy, such as managing interest rates and regulating money supply.

4. Enhances CreditworthinessAdequate foreign reserves can improve a country’s creditworthiness, making it easier to borrow from international lenders.

5. Provides LiquidityForeign reserves serve as a liquidity buffer, allowing a country to meet its short-term foreign exchange obligations.

6. Supports Economic GrowthForeign reserves can be used to support economic growth by providing financing for development projects and investments.

7. Reduces Vulnerability to External ShocksAdequate foreign reserves can reduce a country’s vulnerability to external shocks, such as global economic downturns or trade wars.

8. Facilitates International TradeForeign reserves enable countries to participate in international trade by providing the necessary foreign exchange to settle trade transactions.

9. Supports National SecurityIn some cases, foreign reserves can be used to support national security by providing financing for defense-related expenditures.

10. Enhances Investor ConfidenceAdequate foreign reserves can enhance investor confidence, attracting foreign investment and promoting economic growth.