Nigeria’s Inflation Decline to 15.15% in December 2025 Ignites Questions of Sustainability  

Nigeria closed 2025 with a notable easing in inflationary pressure as headline inflation slowed to 15.15 per cent in December, according to figures released by the National Bureau of Statistics.

The moderation extends a disinflation trend recorded throughout the past year and has been widely attributed to a sharp decline in food prices, offering some relief to households after a prolonged period of high living costs.

The December figure represents a further slowdown from November’s 17.33 per cent and a dramatic improvement on the levels recorded at the end of 2024.

On a month-on-month basis, inflation eased to 0.54 per cent from 1.22 per cent in November, signalling a deceleration in the pace at which prices are rising across the economy.

Food inflation emerged as the dominant source of relief as annual food inflation dropped to 10.84 per cent, while month on month food prices recorded a marginal contraction.

This development has had an immediate impact on household welfare, given that food accounts for the largest share of consumer spending in Nigeria. Analysts note that the decline in food prices was the single most important contributor to the headline disinflation recorded in the last month of 2025.

Despite the positive headline outcome, the inflation data has reignited debate about the credibility of Nigeria’s consumer price statistics following changes to the methodology used in computing the Consumer Price Index.

The NBS recently revised its CPI framework by adopting a 12-month average reference period, replacing the previous single month base. The bureau said the adjustment was designed to align Nigeria’s inflation measurement with international standards and to reduce distortions caused by base effects.

The methodological change has, however, generated unease among analysts, investors and private sector operators who argue that frequent revisions weaken confidence in official data and complicate trend analysis.

Concerns have been amplified by the fact that the revised framework produced noticeable changes in previously published inflation figures, even though the overall direction of disinflation remains intact.

The International Monetary Fund has welcomed both the easing in inflation and the revised CPI methodology, describing the approach as consistent with global best practice. The Fund said the moderation in inflation, if sustained, could support macroeconomic stability and ease cost of living pressures, while encouraging investor confidence in the medium term.

Beyond the statistical debate, economists caution that underlying cost pressures remain firmly embedded in the economy. Core inflation, which excludes volatile food and energy prices, rose to 18.63 per cent in December from 18.04 per cent in November.

This increase has raised questions about the durability of the disinflation trend, particularly in the context of persistent structural constraints.

According to the Centre for the Promotion of Private Enterprise, inflationary pressure remains highly concentrated in essential expenditure categories such as food and beverages, housing, utilities, transportation, restaurants and fuel, which together account for roughly 72 per cent of the inflation burden faced by households.

The organisation argues that high energy costs, rising transport and logistics expenses, insecurity affecting agricultural production, elevated interest rates and import duties on key inputs continue to undermine price stability.

In a policy brief signed by its chief executive officer, Dr Muda Yusuf, the CPPE acknowledged that falling food prices have eased household stress but warned of a growing policy dilemma.

While consumers benefit from lower prices, farmers are facing shrinking margins as input costs remain high. This imbalance risks discouraging agricultural investment and could threaten long term food security if not urgently addressed.

The CPPE noted that the government has acknowledged this challenge, with the Coordinating Minister for the Economy, Wale Edun, indicating that measures are being considered to balance affordability for consumers with investment viability for producers. Analysts say resolving this tension will be critical to sustaining the current disinflation trend.

Experts also stress the importance of stronger coordination between fiscal and monetary authorities. While tighter monetary policy has helped stabilise prices, structural reforms aimed at reducing production and distribution costs are seen as essential to achieving durable price stability without constraining economic growth.

As Nigeria enters 2026, the December inflation data provides cautious optimism that macroeconomic stabilisation efforts are beginning to yield results.

However, analysts warn that without decisive action to tackle structural cost drivers, support farmers and rebuild confidence in inflation statistics, the gains recorded in affordability and price moderation may prove difficult to sustain over the long term.