Nigeria’s inflation rate is on course to slow next year after extending its disinflation run in November, even as economists warn of a temporary break in the easing cycle in December as favorable base effects begin to fade.
Headline inflation slowed for an eighth straight month to 14.45 percent in November, down from 16.1 percent in October, according to data released Monday by the National Bureau of Statistics (NBS). The reading came in slightly below the median estimate of economists surveyed by BusinessDay, underscoring the pace at which price pressures have eased since the start of the year.
The slowing inflation trend strengthens the case for a rate cut at the Central Bank OF Nigeria (CBN)’s monetary policy meeting next February, bringing much needed relief to businesses choked by high interest rates. The Monetary Policy Committee (MPC) left the benchmark interest rate unchanged at 27 percent at its last meeting but has signalled plans to begin an easing cycle as inflation continues to decelerate.
The November reading also places inflation broadly in line with the federal government’s year-end target of 15 percent for 2025, a goal that many analysts had previously described as ambitious following last year’s surge in prices driven by currency depreciation, fuel subsidy removal and food supply shocks.
Analysts say the November slowdown reflects improving domestic supply conditions and relative currency stability. According to Lagos-based Meristem, inflationary pressures continued to soften on the back of the lingering impact of the harvest season on food prices, combined with a more stable naira in the official foreign-exchange market.
Prices declined across a range of key staples, including maize, sorghum, paddy rice and soybeans, reinforcing the downward trend. Over the same period, the naira appreciated 1.45 percent month-on-month, averaging N1,443.85 per dollar in November, compared with N1,465.04 in October.
That backdrop helped push food inflation down to 11.08 percent from 13.12 percent, while core inflation, which strips out volatile food and energy items, eased to 18.04 percent from 18.69 percent the previous month, the data showed.
The disinflation trend supports the objectives of the government’s 2025 fiscal plan, dubbed the ‘Budget of Restoration,’ which aims to stabilise the economy by cutting inflation from above 34 percent to around 15 percent–16 percent, alongside boosting growth and anchoring the exchange rate near N1,500 per dollar. Several of those targets have largely materialised.
Still, economists caution that a significant portion of the apparent progress reflects statistical effects rather than a complete elimination of price pressures.
Nigeria rebased its Consumer Price Index (CPI) earlier this year, shifting the base year to 2024 and updating consumption weights. The methodological change resulted in a sharp statistical drop in headline inflation from about 34.8 percent in December 2024 to 24.48% in January 2025
As the comparison period rolls forward, analysts expect the impact of that low base to fade, setting the stage for a temporary uptick in December’s year-on-year figure.
“There is scope for a reversal in the headline print in December,” analysts at CardinalStone said in a note. “The introduction of the 2024 base year has created an unusually low comparison point, which could mechanically lift the headline reading to about 32.07 percent in December 2025, before normalising from January 2026.”
Economists at Cordros Capital echoed that view, saying the expected spike would largely reflect arithmetic rather than renewed inflationary momentum. In its 2026 outlook, the firm said the CPI reset could make price pressures appear worse than they are, even as underlying monthly trends remain subdued.
“The year-on-year number will look elevated because the base is artificially low,” Cordros said. “However, we expect the disinflation trend to resume after a brief uptick in December.”
Cordros forecasts average inflation of 16.3 percent in 2026, with a year-end rate of 14.7 percent, as tighter monetary policy and improved supply conditions continue to weigh on prices.
Bismarck Rewane, chief executive officer of Financial Derivatives Company, said inflation is cooling across several African markets but will remain in double digits in countries including Nigeria, Egypt, Sudan, Ethiopia, Angola, Malawi and Zimbabwe. He expects Nigeria’s average inflation rate to ease to about 14.9 percent in 2026.
“Inflation is expected to reverse upward in December as base effects fade,” Rewane said at the 18th Alpha Morgan economic review on Wednesday. “For Nigeria and Egypt, a shift toward more orthodox monetary policy frameworks will support disinflation in 2026.”
Other economists are more optimistic about inflation rate next year.
Ayo Teriba, chief executive officer of Economic Associates, said inflation could fall into single digits as early as January 2026, as post-festive demand normalisation further cools prices following the seasonal spending surge associated with December.
Charlie Robertson, a frontier and emerging markets economist, said Nigeria’s inflation trajectory is already consistent with single-digit levels, despite the expected volatility in the year-end data.
“It’s good to see inflation down to 14 percent,” Robertson said in a post on X. “Authorities will struggle to explain why base effects suddenly make the December number jump. In reality, Nigeria is already trending at single-digit inflation.”