The Managing Director of Financial Derivatives Limited, Mr. Bismarck Rewane, has declared that Nigeria’s “official statistics paint a rosy picture that does not align with everyday struggles.”
Rewane said that “the disparity between anecdotal evidence and official data exacerbates concerns about the credibility of Nigeria’s official statistics.”
He made this statement on March 5, 2025, in his presentation at the LBS Breakfast Session that was titled ‘Nigerians Question the Data integrity: Is the Economic Recovery for Real or Is it Just Smoke & Mirror’ in which he stated that the final outcome of the recent rebasing of the consumer price index (CPI) is “seen by many as a magician’s sleight of hand.”
He also compared Nigeria’s and South Africa’s CPI rebasing exercises and declared that the same process yielded different outcomes for the two countries.
Rewane asserted that “Nigeria’s opacity in data revision fuels distrust and uncertainty in economic data.”
According to him, Nigeria’s “rebasing led to 11 per cent fall in inflation” while South Africa’s “rebasing led to increase in inflation to 3.2 per cent from 3.0 per cent.”
He attributed these disparities in the two countries’ rebasing exercises to the fact that “Nigeria had a 15-year gap in updating its base year while South Africa’s data revision cycle is less than five years.”
He further noted that Nigeria did not release full information on its data revamp while South Africa published the computational detail of its new methodology, concluding that “South Africa maintained credibility through open communication and clear documentation.”
He also said that “aligning Nigeria’s unemployment definition with supposed international benchmarks now makes the data too good to be used.
He said that going by the current computation in Nigeria “if you work one hour, you are employed. So, unemployment rate revised sharply to 4.0 per cent from 33 per cent and each Nigerian produced goods worth $800 in 2024.”
But in South Africa, “if you work less than 20 hours, you are unemployed. So, unemployment is currently at 31 per cent but output per head in South Africa in 2024 was $6,600.”
Rewane stated that inflation could be tamed either by employing painful economic adjustments or outright rewriting of statistics and pointed out that the old and new methodologies in computing inflation offered Nigeria different inflation rates, which were 33.4 per cent and 24.5 per cent respectively in January 2025.
He said, “After a 12 month of jumbo interest rate hikes, inflation peaked at 34.8 per cent in December 2024 but moderated mildly to 33.4 per cent in January 2025 (using the old method) but with the new method, it plunged to 24.5 per cent.”
According to him, “comparing the two results will be like comparing apples to oranges.”
According to Rewane, “whatever the method, inflation will taper further in February and March 2025.
“The moderation will be supported by base effects, decline in money supply growth, exchange rate stability, steadiness in logistics cost.”
He, however, noted that investors do not look at inflation in isolation. “They also worry about interest rates, productivity growth and policy shocks.”
Rewane also highlighted that falling inflation is not falling prices but just slower rises in prices.
He said, “Less heat does not mean the fire is out. Prices stack up; inflation just measures the speed.
“Moderating inflation means that prices are still rising, but at a slower pace.
“The question of how slow or how fast may be difficult to answer with unclear methodology,” adding that “bad data is worse than no data; it misleads decisions rather than informing them” as said by one Dean Abbott.
He pointed out that despite falling inflation, exchange rate appreciation, and growing gross domestic production (GPD) as portrayed in official statistics, businesses are finding it difficult to grow their volume of sales, adding that while the “average income per capita five years ago was $2009.56 but now $905.2.”
According to him, “average turnover for the top five companies showed that sales declined in real terms due to drop in disposable income, high inflation, increased cost of goods sold and squeezed margin.”
He said that for sales to increase, “improved economic indicators must translate into higher disposable income and purchasing power,” adding that “if inflation cools to below 20 per cent, consumers may feel less pressure to cut spending.”
He pointed out that “miniaturisation,” which emphasised a shift from premium to budget brands, is now the name of the game currently as businesses are looking for answers to their sales struggles.
“Consumers are choosing sachet packaged products over larger packs
“Firms reduced product sizes (shrinkflation) to maintain affordability.
“Consumers are down, buying value brands over premium.
“The FMCGs experienced declining sales volumes as consumers downsized spending habits,” he said.
