Nigeria Inflation Slows Down Sharply

Nigeria’s inflation rate slowed down significantly in December 2025, marking a welcome turnaround after months of pressure on prices. According to recent data, the Consumer Price Index (CPI) rose to 131.2, representing a 0.7-point increase from November. Although prices are still rising, the pace of increase has moderated considerably.

On a year-on-year basis, the headline inflation rate stood at 15.15 percent in December 2025, down from 17.33 percent in November. This decline is even more pronounced when compared to December 2024, when inflation was 34.80 percent, resulting in a 19.65 percentage-point reduction. The month-on-month headline inflation slowed to 0.54 percent, down from 1.22 percent in November, indicating that prices were still rising but at a slower rate.

In terms of urban and rural inflation, the data shows that urban inflation stood at 14.85 percent year-on-year, down from 37.29 percent in December 2024. However, on a month-on-month basis, urban inflation edged up to 0.99 percent, slightly higher than November’s 0.95 percent. Rural inflation, on the other hand, continued to ease more decisively, standing at 14.56 percent year-on-year, compared to 32.47 percent a year earlier.

Food inflation, a key pressure point for Nigerian households, recorded significant improvements. In December 2025, food inflation stood at 10.84 percent year-on-year, down dramatically from 39.84 percent in December 2024. On a month-on-month basis, food prices declined by 0.36 percent, driven by falling average prices of staple foods such as tomatoes, garri, and eggs.

The slowdown in inflation has significant implications for Nigeria’s economy. Lower food inflation eases pressure on household incomes, while softer core inflation supports business planning and investment decisions. This trend also suggests improving supply conditions and a gradual stabilisation of prices, which could lead to lower interest rates and improved credit access over time. For Nigerians abroad, easing inflation means stronger purchasing power for remittances and improved investment confidence, particularly in consumer-facing sectors.

While inflation in Nigeria remains high, the direction is changing. The December 2025 data shows prices rising more slowly, food costs easing, and rural pressures declining, signaling an early but important sign that economic stability may be returning. As the country continues to navigate its economic challenges, this development is worth watching closely, with potential implications for economic recovery and growth.