By Atoyebi Nike
Economic analyst and Managing Director of Financial Derivatives Company, Bismarck Rewane, has raised doubts about the credibility of Nigeria’s inflation data, citing inconsistencies in the latest figures released by the National Bureau of Statistics (NBS).
According to the NBS, Nigeria’s headline inflation rate declined slightly to 23.71% in April 2025, down from 24.23% in March. However, Rewane expressed skepticism, pointing to significant regional discrepancies—particularly between food-producing and food-consuming states.
“The NBS data shows some food-producing states recording very high inflation, while major consuming states report much lower rates,” he said.
He highlighted that Benue recorded an inflation rate of 51%, followed by Ekiti (34%) and Kebbi (33%)—all known for food production. In contrast, Ebonyi (7.19%), Adamawa (9.52%), and Ogun (9.91%), which are predominantly consuming states, reported much lower inflation levels.
“How can the states producing the food have higher prices, while the consuming states report much lower rates? Are these numbers credible? If not, what exactly are we looking at—flaws in methodology or data distortion?” Rewane questioned.
He compared the nearly 43% difference between Benue and Ogun as “almost inconceivable,” implying that either the data collection is flawed or there is a deeper systemic issue at play.
Volatility in Food Prices
Rewane also dismissed suggestions that food prices are generally declining. He noted the recent drop in rice prices was due more to imports and rumours of “poisoned rice” than sustainable market forces.
“Yes, some food prices have dropped, but is the trend sustainable? For instance, the price of rice has been volatile, not driven by production efficiency but by external factors,” he noted.
He also referenced mixed movements within the food basket:
Tomato prices surged by 107%, largely due to the outbreak of “tomato ebola.”
Dairy prices, however, remained relatively stable.
Structural Issues and Inflation Dynamics
According to Rewane, understanding inflation requires looking at both supply and demand dynamics.
“Inflation isn’t just about currency weakness. We must ask—does a weak naira cause inflation, or does inflation cause a weak naira?”
He argued that government attempts to control food prices through direct production or sales are misguided.
“Government isn’t meant to produce or sell food. That’s not sustainable. The market determines prices through supply and demand,” he said.
Rewane stressed that inflation is mainly driven by two factors:
“Production shortfalls due to insecurity and high logistics costs (petrol, diesel, poor infrastructure).
Excess liquidity, which increases demand without a corresponding increase in supply.”
Need for Structural Reforms
While monetary policy—like raising interest rates—can help control demand, Rewane argued that only structural reforms can address the supply side of inflation.
“To reduce inflation sustainably, we need improved power supply, efficient logistics, lower production costs, and higher agricultural yields. That’s what will ultimately determine prices and restore stability,” he concluded.
