We commence our 2026 weekly macroeconomic commentary with a forward-looking assessment of Nigeria’s general price level for December 2025, ahead of the official release by the National Bureau of Statistics (NBS) scheduled for next week.
Leading into December, Nigeria had recorded eight consecutive months of disinflation between April and November 2025. Over this period, headline inflation rate – a composite measure capturing food, energy, and core price movements – declined steadily from 24.2% y/y in March to 14.5% in November. This marked the lowest reading since the CPI rebasing in December 2024 and the softest inflation outcome since October 2020 at 14.2%, under the previous CPI framework.
The December 2024 rebasing materially altered the CPI structure. The weights of food & non-alcoholic beverages and energy declined to 40.1% and 6.4% from 51.8% and 10.8%, respectively, while the core component – which captures the price dynamics of less volatile items – expanded to 53.5% from 37.4%. This structural shift partly explains the pronounced disinflation observed through most of 2025, even when market prices of major staples and consumer necessities remained sticky.
Based on our model, which benchmarks December 2025 price dynamics against the rebased CPI baseline of December 2024, we estimate headline inflation to rise sharply to 33.6% y/y from 14.5% in November, driven largely by base effects. On a m/m basis, headline inflation is estimated at 2.4% (November: 1.2%), representing the strongest monthly increase since March 2025 (3.9%).
Both food and core components are expected to contribute to the projected uptick. Food inflation is estimated to rise by 2.7% m/m (November: 1.1%), with the y/y rate jumping to 31.7% from 11.1%, reflecting base effects and typical year-end demand pressures on staples and frozen foods. Core inflation is estimated at 1.9% m/m (November: 1.3%), with the y/y rate rising to 34.5% from 18.0%, also largely driven by base effects.
Overall, we estimate Nigeria’s average headline inflation rate for 2025 at 22.1% (FG’s budget baseline 15.8%), although, we anticipate the average print to correct downward to 15.4% in 2026 on the support of relative exchange rate stability and statistical realignment.
Afrinvest
