Nigeria’s headline inflation, which had declined for eight consecutive months in 2025, reversed slightly in December, rising from 14.45 per cent in November to 15.15 per cent on a month-on-month basis.

The National Bureau of Statistics (NBS), in its December 2025 Consumer Price Index (CPI) report released on Thursday, said the rise was largely artificial, resulting from what it termed a “base effect” associated with the arithmetic computation of the inflation rate.

The report shows that on a year-on-year basis, December 2025 inflation stood at 19.65 per cent, significantly lower than the 34.80 per cent recorded in December 2024.

Food inflation, which remains a major driver of overall inflation in Nigeria, declined to -0.36 per cent on a month-on-month basis, down from 1.13 per cent in November 2025. On a year-on-year basis, food inflation stood at 10.84 per cent in December 2025, compared with 39.84 per cent in December 2024.

While declining food prices have provided relief for households struggling with high living costs, the trend is disadvantageous for farmers facing rising input costs, as the prices of their produce continue to fall amid massive food importation by the federal government.

Data from the NBS shows that Nigeria spent about N5.27 trillion on food and beverage imports in the first nine months of 2025 — an 11.7 per cent increase compared to the same period in 2024.

Explaining the cause of the December spike, Statistician-General and NBS Chief Executive, Adeyemi Adeniran, attributed it to the rebasing of the CPI, which adopted 2024 as the new base year after a 15-year gap from the previous 2009 base.

He said the spike “does not reflect a deterioration in underlying structural or economic conditions; but a consequence of the computational methodology,” adding that it is driven by technical base effects rather than changes in economic fundamentals.
“Following the rebasing exercise and the methodology adopted for December 2025, a significant artificial spike in the inflation rate is expected, as some analysts have already projected,” Adeniran said.

“This spike arises from the base effect, with December 2024 equated to 100 following the rebasing. Base effects are common in statistical practice, particularly when comparing data across periods with unusually high or low prices. They are neither unexpected nor unusual.

However, when such effects occur, especially when they are artificial and arithmetic rather than reflective of structural changes in the economy, it is essential to clearly communicate and explain them to users,” he added.

The explanation comes shortly after the Nigeria Economic Summit Group (NESG) released its Business Confidence Monitor (BCM) for December 2025, which highlighted a slowdown in business performance that month due to the rising cost of doing business.
Manufacturers, the report noted, continue to face high energy costs, despite improvements in power supply, and bear premiums not only on tariffs but also on alternative energy.

Critics argue that the NBS’s “base effect” explanation may not fully reflect the reality on the ground. Prices of manufactured goods remain high due to rising production costs, and transport fares have increased despite moderating fuel prices, further driving logistics costs.