Nigeria's headline inflation rate experienced a slight uptick in December 2025, ending a streak of eight consecutive monthly declines recorded throughout the year.
December Inflation Data and the Base Effect Explanation
The National Bureau of Statistics (NBS) reported that the inflation rate rose to 15.15 per cent on a month-on-month basis in December, up from 14.45 per cent in November. The data was contained in the Consumer Price Index (CPI) report released on Thursday, 15 January 2026.
However, the Statistician-General and Chief Executive of the NBS, Adeyemi Adeniran, was quick to clarify that this increase is largely artificial. He attributed it to a "base effect" resulting from the rebasing of the CPI, which now uses 2024 as the new base year, replacing the previous base year of 2009.
"This spike does not reflect a deterioration in underlying structural or economic conditions; but a consequence of the computational methodology," Adeniran stated. He emphasized that the change was driven by technical base effects rather than shifts in economic fundamentals.
Contrasting Year-on-Year Trends and Food Inflation
When viewed from a broader perspective, the year-on-year figures tell a more positive story. The inflation rate for December 2025 stood at 19.65 per cent, which is significantly lower than the 34.80 per cent recorded in December 2024.
A notable development was seen in food inflation, which actually turned negative on a month-on-month basis. It declined to -0.36 per cent in December, down from 1.13 per cent in November. On a year-on-year basis, food inflation was 10.84 per cent in December 2025, a sharp drop from the 39.84 per cent seen in the same month of 2024.
While falling food prices offer some respite to consumers, they present a challenge for local farmers. Farmers are grappling with high input costs even as the prices they receive for their produce continue to fall, a situation exacerbated by significant food imports.
Economic Context and Criticisms
The NBS data reveals that Nigeria spent approximately N5.27 trillion on food and beverage imports in the first nine months of 2025. This marks an 11.7 per cent increase compared to the same period in 2024.
The inflation report follows closely on the heels of the Nigeria Economic Summit Group's (NESG) December 2025 Business Confidence Monitor. That report highlighted a slowdown in business performance, driven by the rising cost of operations. Manufacturers, in particular, continue to face steep energy costs.
Despite the NBS's technical explanation, some critics argue that the "base effect" reasoning may not fully capture the economic pressures felt by Nigerians. Prices for many manufactured goods remain elevated due to high production costs, and transport fares have increased, pushing up logistics expenses even as fuel prices have moderated.
