Spatial Dynamics, Convergence, and Persistence of Inflation in Post-Rebasing Nigeria: Evidence from State-Level CPI Indices (2024–2025)

Authors

Fiyidi Mikailu, Yonwul Jacqueline Dakyen, Ugo Uwadiako Enebeli, Yakubu Joel Cherima, Rejoice Kaka Hassan, Ebelechukwu Lawrence Enebeli, Onigah Peter Oko, Kebiru Umoru, Zubairul Islam

Abstract

Following the 2024 rebasing of Nigeria’s Consumer Price Index (CPI), understanding the spatial and temporal behavior of inflation at the sub-national level has become critical for evidence-based macroeconomic and food-security policy. This study investigates the spatial dynamics, convergence properties, and persistence of inflation across Nigeria’s 36 states and the Federal Capital Territory using newly rebased state-level CPI data for February 2024–November 2025. Headline (All-Items) and Food CPI series were analyzed to capture both general price movements and food-specific pressures. Methodologically, the study integrates spatial econometrics and panel convergence analysis. Spatial dependence and cross-border spillovers were assessed using Global Moran’s I, Local Indicators of Spatial Association (LISA), and spatial regression models (SAR, SEM, SDM). Inflation convergence was examined through σ-convergence (cross-sectional dispersion over time) and β-convergence (catch-up dynamics based on initial price levels). Finally, inflation persistence and regime shifts were evaluated using state-specific AR(1) models and Bai–Perron structural break tests. Results reveal weak global spatial autocorrelation but the presence of localized inflation hot-spots and cold-spots, particularly in northern states (e.g., Kebbi, Sokoto, Zamfara) and Rivers State. σ-convergence results indicate sharp short-term divergence in 2025, especially for food inflation, while β-convergence estimates provide strong evidence of long-run price-level convergence across states. Persistence analysis shows predominantly negative or insignificant AR(1) coefficients, implying that post-rebasing inflation shocks are largely mean-reverting and short-lived, with widespread structural breaks concentrated in early 2024.

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