The Nigerian government has officially admitted that food prices and essential commodities may never revert to pre-subsidy removal levels, despite ongoing economic reforms aimed at stabilizing the economy.
This admission was made by Sunday Dare, Special Adviser to President Bola Tinubu on Media and Public Communication, in a statement issued on Thursday.
“Yes, prices are not back to the pre-subsidy removal regime. They probably may never be. But prices of foodstuffs and other services are dropping across the board. Multiple independent market surveys have confirmed this development,” Dare stated.
Dare pointed to the latest inflation report by the National Bureau of Statistics (NBS), which claims that inflation fell from 34.8% to 24.48% following a rebasing of the Consumer Price Index (CPI).
The rebased CPI, which updates the price reference period to 2024 and the weight reference period to 2023, has been defended by the government as a necessary step to improve economic data accuracy.
According to the revised NBS report, food inflation stands at 26.08%, core inflation at 22.59%, urban inflation at 26.09%, and rural inflation at 22.15%. Dare described the rebasing as a globally accepted practice, arguing that it provides a more precise picture of the economy.
“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 said.
However, it is believed that the government’s inflation figures misrepresent actual market conditions.
Dare’s statement reflects a shift in government rhetoric—from promising that reforms would lead to significant economic rebirth resulting in an affordable cost of living, to now acknowledging that previous prices are gone for good. It also confirms what many Nigerians have long feared, that the economic shocks triggered by the fuel subsidy removal in May 2023 have left lasting damage, and there is little hope of a full reversal of the cost-of-living crisis.
Since taking office, Tinubu’s administration has implemented bold but painful economic reforms, including fuel subsidy removal, exchange rate unification, interest rate hikes, and tight monetary policies to curb inflation.
The government argued that the policies were necessary to free up funds for infrastructure and social programs. However, the immediate effect was a nationwide economic crisis, as transportation costs skyrocketed, making movement and logistics more expensive. The cost of goods and services surged, particularly food prices, while household incomes were eroded, leaving millions unable to afford basic necessities.
Even after months of government interventions, market realities have remained grim.
Has the Government Run Out of Options?
The admission that prices may never return to their previous levels has been interpreted by many as an admission that the government has exhausted its policy options to steer the economy out of its current turmoil.
Interest rate hikes have been implemented multiple times by the Monetary Policy Committee (MPC) to curb inflation, yet prices remain high.
However, the Tinubu administration highlighted progress in the oil sector as evidence of economic recovery.
According to Dare, Nigeria’s crude oil production has exceeded 1.75 million barrels per day, reducing the need for petroleum imports and alleviating pressure on foreign exchange reserves.
Additionally, the government cited a recent Bloomberg Africa report, which suggested that Nigeria’s economic outlook is improving and that the country could soon regain its status as Africa’s largest economy once the rebased Gross Domestic Product (GDP) figures are released next month.
“Under President Tinubu’s watch, we are seeing the headwinds abating and a new economic tailwind in favor of economic reforms,” Dare asserted.
