The Bola Tinubu administration has declared that food and commodity prices in Nigeria may never return to the levels before the removal of fuel subsidies, despite ongoing economic reforms aimed at stabilizing the economy.
Sunday Dare, President Tinubu’s Special Adviser on Media and Public Communication, made this disclosure in a statement on Thursday, addressing concerns over the persistent high cost of living. He acknowledged that Nigerians have faced economic hardship since the fuel subsidy removal but insisted that key economic indicators suggest a slow but steady recovery.
The removal of fuel subsidies in May 2023 triggered a sharp rise in inflation, pushing up the cost of transportation, goods, and services. The food sector was hit hardest, with prices soaring beyond the reach of many Nigerians, fueling public outcry and demands for urgent government intervention.
Dare, however, pointed to the latest report from the National Bureau of Statistics (NBS), which showed that Nigeria’s inflation rate has declined from 34.8% to 24.48% year-on-year after the rebasing of the Consumer Price Index (CPI). The report further detailed:
Food inflation: 26.08%
Core inflation: 22.59%
Urban inflation: 26.09%
Rural inflation: 22.15%
The CPI rebasing, which updated the price reference period to 2024 and the weight reference period to 2023, was described as a crucial step in aligning Nigeria’s economy with present realities.
Prices Stabilizing, But Pre-Subsidy Rates Unlikely
While acknowledging that prices remain high, Dare argued that market trends indicate a gradual stabilization.
“Yes, prices are not back to the pre-subsidy removal regime. They probably may never be. But foodstuffs and other essential goods are dropping across the board. Multiple independent market surveys have confirmed this development,” he stated.
Dare also defended the CPI rebasing as a globally recognized economic practice that improves the accuracy of economic data, enabling policymakers to make more informed decisions.
> “Rebasing injects precision into policymaking by providing a panoramic view of a country’s economic terrain, exposing both its strong and weak sectors. Vital information to guide investors is also provided,” he explained.
The Tinubu administration has continuously defended its economic policies, stating that ongoing reforms in the oil sector and the shift towards local refining have begun to yield positive results.
Nigeria’s crude oil production has reportedly exceeded its quota, now standing at 1.75 million barrels per day, reducing dependence on petroleum imports and easing pressure on foreign exchange.
The government also cited a Bloomberg Africa report, which acknowledged that “Nigeria’s fortunes appear to be looking up after nearly two years of painful economic reforms, and investors are taking notice.”
Additionally, the report suggested that Nigeria could regain its position as Africa’s largest economy when the rebased Gross Domestic Product (GDP) figures are released next month, potentially pushing the GDP close to $500 billion.
Despite the public frustration, Dare maintained that the government’s reforms were essential for long-term economic stability.
> “Under President Tinubu’s watch, we are seeing the headwinds abating and a new economic tailwind in favor of reforms,” he asserted.
While Nigerians continue to grapple with the rising cost of living, the presidency remains steadfast in its stance that the economic policies in place will pave the way for a more resilient and self-sustaining economy in the near future.
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