Nigeria closed 2025 with a 15.15% inflation in December, according to the National Bureau of Statistics. This marked a sharp slowdown from the 34.80% recorded a year earlier and one of the steepest year-on-year decelerations in recent history.
The figure offers cautious optimism after the inflation shock of 2024. Yet it masks a harder truth. Prices are rising more slowly, but they remain high. For most Nigerians, daily living costs are still painfully elevated.
A Slower Pace of Price Increases
The Consumer Price Index rose to 131.2 points in December, up slightly from 130.5 in November. Month-on-month inflation fell to 0.54%, less than half of November’s 1.22%. Headline inflation dropped by 2.18 percentage points between November and December alone.
Compared with December 2024, the turnaround looks dramatic. But the slowdown reflects both economic changes and statistical adjustments.
The Impact of CPI Rebasing
In early 2025, the NBS rebased the Consumer Price Index, updating the base year from 2009 to 2024. This change immediately lowered reported inflation levels by updating consumption weights to reflect modern spending patterns.
The rebasing explains part of the sharp drop early in the year. However, inflation continued to decline month after month under the new methodology, pointing to genuine moderation rather than a purely technical effect.
Food Inflation Led the Decline
Food and non-alcoholic beverages make up more than half of Nigeria’s inflation basket. In December, food inflation fell to 10.84% year-on-year, down from nearly 40% a year earlier. Every month, food prices declined by 0.36%, an unusual but welcome development.
Lower prices for staples such as tomatoes, garri, beans, eggs and vegetables helped drive the improvement, supported by the harvest season and a stronger naira. Still, regional differences remained wide. Food inflation ranged from over 15% in Yobe to just above 4% in Akwa Ibom.
What Drove the Moderation
Several factors contributed to the slowdown. The naira strengthened for much of 2025, easing import costs. Oil output improved, boosting foreign exchange inflows. Agricultural supply increased, helped by better security in some producing regions.
Monetary policy also mattered. After aggressive rate hikes in 2024, the Central Bank held its policy rate steady at 22.75% toward the end of 2025, signalling confidence that inflation was easing.
Core inflation stayed high at 18.63%, and energy prices rose sharply in December, reflecting persistent fuel and electricity pressures.
Why It Still Feels Hard
A 15.15% inflation rate still means prices are rising. The slowdown does not reverse the steep increases Nigerians absorbed in 2024 and early 2025. Average inflation over the past twelve months stood at 23.01%, capturing the sustained erosion of purchasing power.
Wages have not kept pace. Transport and food costs consume larger shares of household income. Many families have cut back, downgraded consumption, or abandoned non-essential spending altogether.
The Test of 2026
The key question is whether inflation continues to ease or settles at a higher long-term level. Currency stability, energy pricing, agricultural output and security conditions will all be decisive.
For policymakers, the challenge is balancing growth with price stability. For households, the need is simpler but harder to meet because they don’t need just slower inflation, but a period of genuine price stability and rising real incomes.
Nigeria’s 15.15% inflation rate signals progress. It also underlines how far the country still has to go.
