Nigeria’s headline inflation rates spiked to 15.5 percent in December, after the statistics office revised the data used in calculating household expenditure, to truly reflect economic reality.
“To provide transparency, the agency will take the unusual step of publishing both the headline rate that reflects economic fundamentals and the inflated figure.”Statistician-General Prince Adeyemi Adeniran said.
Many analysts had projected that December inflation figures will spike up to 32.1 percent as a result of a very low base effect the statistical rebasing that was done in December 2024.
“The statistical rebasing that was done in December 2024 has created a very low base, which would temporarily translate to a marked increase in headline print to 32.1 percent in December 2025 (assuming no other adjustment by NBS), before normalising from January 2026. Overall, inflation in 2025 is likely to average 22.0 percent vs 31.69 percent in 2024,” CardinalStone analysts said in their 2026 outlook report.
Read also: NESG sees Nigeria’s inflation hitting single-digit by 2029
Similarly, Meristem Stockbrokers analysts projected in its Outlook report, headline inflation to return to a downward path following a one-off uptick in December 2025 to 32 percent.
However, data published shows that Nigeria’s consumer price index saw its first increase in 10 months to 15.5 percent in December 2025 from 14.45 percent the previous month.
Food inflation
This increase was due to a spike in core baskets.
Food inflation dropped to 10.84 percent in December from 11.8 percent in November, while core inflation rose to 18.63 percent from 18.04 percent the previous month.
On a month-on-month basis, inflation dropped to 0.54 percent from 1.2 percent, largely driven by food inflation which dropped to -0.36 percent from 1.13 percent the previous month.
Why was the methodology changed
The base index for CPI calculation will be normalised from the earlier equated December 2024 = 100 to the average of the 12 months of 2024 (January to December 2024). Hence, instead of comparing the December 2025 reference index to that of December 2024, the NBS will compare it to the average price level over the past 12 months.
This adjustment mitigates low base effects and ensures year-on-year inflation rates reflect actual price movements rather than statistical distortions.
Revisions to preceding months’ CPI data will be communicated subsequently to maintain consistency.
Using December 2024 = 100 would have artificially increased the December 2025 year-on-year inflation rate and create a misleading spike.
The NBS observes that the current inflation figures are true depictions of economic realities.
Base effect adjustments are a global statistical practice, not unique to Nigeria.
Read also: CBN’s liquidity mop-up rises 182% in one year as inflation eases
What does this mean for interest rate ?
The CBN stated in recent communiques that Nigeria’s inflation at a double-digit level is unacceptable and that lowering inflation remains a core policy objective.
According to Olaolu Boboye, lead economist CardinalStone said despite this position, the prevailing supply-side bottlenecks make the argument for a return to single-digit inflation unlikely in 2026.
“ Inflation is likely to stabilise within the low double-digit range until fiscal authorities make meaningful progress in addressing these underlying challenges. Hence, inflation running below its long-run average and staying below the 2026 CBN inflation target of 16.0 percent should provide sufficient comfort for the apex bank to expedite policy rate cuts,” he said in the CardinalStone 2026 outlook report.