Nigeria’s inflation rate dropped to 15.15% in December 2025, a significant decrease from 34.80% in December 2024. The National Bureau of Statistics (NBS) attributes this decline to a methodological review and rebasing of the Consumer Price Index (CPI).
Key Highlights:
– Food Inflation: Dropped to 10.84% year-on-year, with prices of staples like tomatoes, garri, eggs, and vegetables declining.
– Core Inflation: Eased to 18.63% year-on-year, excluding volatile farm and energy prices.
– Urban and Rural Inflation: Urban inflation stood at 14.85%, while rural inflation was 14.56%.
The NBS has adopted a new methodology, using a 12-month index reference period with 2024 as the base year, aligning with IMF and ECOWAS statistical standards.
As Nigeria enters 2026, the economic landscape is expected to be shaped by several factors. The IMF projects inflation to rise to 37% in 2026, although some economists believe this forecast may be overstated. On the other hand, Fitch Solutions predicts Nigeria’s real GDP growth to increase from 4.1% in 2025 to 4.3% in 2026, driven by stronger household spending and fixed investment amid easing inflation and falling interest rates.
The Manufacturers Association of Nigeria (MAN) forecasts a more optimistic inflation rate of 14% in 2026, supported by easing food prices, stable energy costs, and appreciation of the naira.
Key Economic Indicators:
– *GDP Growth*: 4.3% in 2026 (Fitch Solutions)
– *Inflation Rate*: 37% (IMF), 14% (MAN)
– *Monetary Policy Rate*: 23% (MAN)
– *Oil Production*: 1.73 million barrels per day (Fitch Solutions)
Nigeria’s inflation rate has fluctuated over the years, with the highest rate recorded in 1995 at 72.84% under General Sani Abacha’s military regime. Other notable highs include 57.03% in 1994 and 34.6% in 2024.
To sustain low inflation, Nigeria can focus on effective monetary policy, fiscal discipline, and structural reforms. Some strategies include:
1. *Monetary Policy*: Maintain a credible framework using interest rates and reserve requirements.
2. *Fiscal Discipline*: Prioritize fiscal sustainability and productive spending.
3. *Structural Reforms*: Promote competition, improve infrastructure, and enhance productivity.
Countries like Singapore, Chile, and New Zealand have successfully implemented these strategies, maintaining low inflation and stable economies.
Meanwhile, Venezuela has the highest inflation rate in the world, projected at 682.1% in 2026, due to political challenges and currency devaluation.
