By Ahmed Ahmed
Nigeria’s headline inflation rate eased sharply to 15.15 percent in December 2025, reflecting a combination of slowing price momentum and a major methodological adjustment by the National Bureau of Statistics. The new figure marks a significant moderation from both the preceding month and the exceptionally high levels recorded a year earlier, offering cautious relief after a prolonged period of inflation stress.
According to the latest Consumer Price Index (CPI) report released by the NBS, the headline CPI rose to 131.2 points in December from 130.5 points in November, indicating that average prices continued to increase, but at a much slower pace. On a year-on-year basis, inflation fell from 17.33 percent in November 2025 and was dramatically lower than the 34.80 percent recorded in December 2024.
The bureau attributed the sharp deceleration largely to changes introduced after the rebasing of the CPI, alongside easing month-to-month price pressures across key consumption categories.
Monthly Inflation Slows Further
On a month-on-month basis, headline inflation stood at 0.54 percent in December, down from 1.22 percent in November. The NBS said this showed that the rate of increase in average prices slowed considerably in the final month of the year, pointing to easing short-term inflationary pressures.
Despite the softer monthly reading, the bureau cautioned that inflationary conditions over the full year remain elevated. The twelve-month average inflation rate for the period ending December 2025 stood at 23.01 percent, underscoring the cumulative burden of price increases faced by households throughout the year.
Why the Numbers Changed
The December figures followed a methodological review that altered how year-on-year inflation is calculated. Instead of using a single-month reference period, the NBS computed headline inflation and other sub-indices using a twelve-month index reference period, with the average CPI for 2024 set to 100.
According to the bureau, relying on a single-month base would have produced an artificial spike in December’s year-on-year inflation rate, driven by base effects rather than actual price movements. The adjustment, it said, aligns Nigeria’s CPI framework with international standards outlined in the IMF Consumer Price Index Manual and the ECOWAS Harmonised CPI Manual.
Earlier in December, the NBS had reported November inflation at 14.45 percent year on year. Following the review, the November rate was revised upward to 17.33 percent, reflecting the new methodology.
Food Inflation Shows the Sharpest Relief
Food inflation, a major pressure point for Nigerian households, recorded one of the steepest improvements. The food inflation rate fell to 10.84 percent year on year in December 2025, compared with 39.84 percent in December 2024.
On a month-on-month basis, food inflation declined by 0.36 percent, reversing the 1.13 percent increase recorded in November. The NBS linked the improvement to falling average prices of staple food items including tomatoes, garri, eggs, millet, vegetables, plantain, beans, wheat grain, ground pepper, fresh onions, potatoes, and carrots.
Over the twelve-month period, however, average food inflation remained high at 22.00 percent, reflecting the persistence of earlier supply and cost pressures.
Core Inflation Also Moderates
Core inflation, which excludes volatile food and energy prices, also eased notably. The index fell to 18.63 percent year on year in December 2025 from 29.28 percent a year earlier.
Month on month, core inflation slowed to 0.58 percent from 1.28 percent in November, while the twelve-month average core inflation rate stood at 23.49 percent. The moderation suggests easing pressure across non-food components such as services and manufactured goods.
Urban and Rural Inflation Trends Diverge
Both urban and rural inflation rates eased sharply on a year-on-year basis. Urban inflation declined to 14.85 percent in December 2025 from 37.29 percent a year earlier, while rural inflation fell to 14.56 percent from 32.47 percent.
On a month-on-month basis, however, the picture was mixed. Urban inflation edged up slightly to 0.99 percent from 0.95 percent in November, while rural inflation recorded a decline of 0.55 percent, compared with a 1.88 percent increase in the previous month.
The twelve-month average inflation rate stood at 23.46 percent for urban areas and 21.93 percent for rural areas.
Energy Up, Services and Goods Ease
Sub-indices showed varied movements in December. Farm produce prices declined by 0.41 percent month on month, reversing the increase recorded in November. Energy prices rose by 2.74 percent, higher than the 1.08 percent increase a month earlier, reflecting ongoing cost pressures in fuel and power-related items.
Services inflation slowed sharply to 0.15 percent from 1.78 percent, while goods inflation eased marginally to 0.64 percent from 0.73 percent.
Wide Gaps Across States
State-level data revealed significant disparities in inflation outcomes. On a year-on-year basis, Abia recorded the highest all-items inflation rate at 19.03 percent, followed by Ogun at 18.80 percent and Katsina at 18.66 percent. Sokoto recorded the slowest increase at 8.61 percent, with Plateau and Kaduna also posting relatively low rates.
Month-on-month figures showed Cross River recording the highest increase at 3.11 percent, followed by Abia and Delta. Ondo posted the sharpest decline at minus 3.74 percent, while Gombe and Jigawa also recorded notable decreases.
Food inflation followed a similar pattern, with Yobe recording the highest year-on-year food inflation, followed by Ogun and the Federal Capital Territory, while Akwa Ibom, Sokoto, and Plateau recorded the slowest increases.
The NBS cautioned against direct interstate comparisons, noting that consumption baskets and CPI weights differ across states, making simple comparisons potentially misleading.
Explaining the Rebase Effect
Addressing concerns about possible data distortions, the Statistician General of the Federation and NBS Chief Executive Officer, Adeyemi Adeniran, said the bureau had anticipated confusion around the December figures.
He explained that the CPI rebasing adopted 2024 as the new base year after a 15-year gap from the previous 2009 base, creating temporary base effects that could exaggerate year-on-year movements.
According to him, such base effects are common in index-based measurements and do not necessarily reflect structural changes in the economy. What matters, he said, is clear communication so users understand when inflation movements are driven by arithmetic adjustments rather than underlying price dynamics.
What the Data Signals
The December inflation data suggest that Nigeria is entering 2026 with easing short-term price pressures, particularly on food, even as the broader inflation environment remains elevated when viewed over the full year.
For policymakers and markets, the challenge now lies in sustaining the downward momentum through supply-side reforms, stable energy pricing, and disciplined macroeconomic management, while ensuring that technical adjustments in data reporting do not obscure the real cost-of-living pressures faced by households.
