Nigeria’s purchasing power has not fully recovered, despite a significant easing of headline inflation to 15.15 per cent in December 2025. The Lagos Chamber of Commerce and Industry (LCCI) has cautioned that both households and businesses are still grappling with the residual impacts of previous price surges.
In a recent interview, the President of the LCCI, Leye Kupoluyi, acknowledged that the latest inflation figures signal a deceleration in the rate of price increases. However, he stressed that this does not signify a complete resolution of Nigeria’s persistent inflation challenges.
Persistent Structural Inflation
Kupoluyi highlighted that when viewed over a longer timeframe, inflation remains structurally elevated. He pointed to the 12-month average headline inflation, which stood at a substantial 23.01 per cent. This was further broken down by core inflation at 23.49 per cent, urban inflation at 23.46 per cent, and rural inflation at 21.93 per cent.
“The elevated averages underscore the cumulative effect of prolonged inflationary pressures throughout the year,” Kupoluyi explained. “This indicates that purchasing power has not yet fully rebounded, and the lingering effects of past price shocks continue to burden households and businesses.”
Inflation Data and Trends
Official data released by the National Bureau of Statistics (NBS) showed a year-on-year headline inflation rate of 15.15 per cent for December 2025. This represents a decrease from the 17.33 per cent recorded in November 2025 and a dramatic fall from the 34.80 per cent observed in December 2024.
Furthermore, the month-on-month inflation rate also experienced a decline, falling to 0.54 per cent from 1.22 per cent. While this indicates that prices are still on an upward trajectory, the pace of this increase has significantly decelerated.
Economic Cooling and Fragility
Kupoluyi affirmed that the Nigerian economy is exhibiting signs of cooling after a period of intense overheating. Nevertheless, he cautioned that the economy remains fragile, with the easing of price pressures being uneven across different sectors.
The moderation in inflation, he noted, signifies a shift from rapid price increases to a more gradual disinflationary process, rather than an outright reversal of price levels. “These figures suggest that prices are still rising, but at a considerably slower rate,” Kupoluyi elaborated. “This reflects improving economic dynamics rather than a sudden and fundamental transformation of the economy.”
Food Inflation: A Key Development
A particularly encouraging development highlighted by Kupoluyi was the significant reduction in food inflation. Year-on-year food inflation dropped to 10.84 per cent, a substantial decrease from the 39.84 per cent recorded previously.
The LCCI president noted that the falling prices of essential food items such as tomatoes, garri, beans, grains, onions, and vegetables have provided much-needed relief to household budgets. Food items alone contributed 6.06 percentage points to the overall headline inflation. While this data warrants a degree of optimism, Kupoluyi stressed the need for caution in policy formulation.
Policy Recommendations
Kupoluyi issued a warning against premature policy easing, citing the persistent high average inflation and the upward trend in energy costs. He urged policymakers to maintain a sustained focus on critical areas:
- Food Supply Chains: Ensuring the stability and efficiency of food production and distribution networks.
- Energy Reforms: Continuing efforts to reform the energy sector to reduce costs and improve availability.
- Transport Efficiency: Implementing measures to enhance the efficiency of the transportation sector, thereby lowering logistical costs.
These measures, he argued, are crucial for consolidating the current disinflationary gains.
LCCI Defends NBS Methodology
The LCCI also publicly supported the National Bureau of Statistics’ revised Consumer Price Index (CPI) methodology, which followed a rebasing exercise. Kupoluyi described the new methodology as statistically sound and aligned with global best practices.
He explained that the decision to calculate year-on-year inflation using a twelve-month average base was designed to prevent artificial spikes that could have distorted economic analysis and policy responses. While acknowledging that concerns about revisions to earlier figures are understandable, Kupoluyi stated that such adjustments are an unavoidable part of a rebasing exercise. He commended the NBS for enhancing transparency by clearly distinguishing between base effects and underlying economic fundamentals.
Industry Perspectives on Inflation Moderation
The National Association of Small-Scale Industrialists (NASSI) has also welcomed the moderation in December inflation. The association attributed this positive trend to government interventions in food production and improvements observed in the energy sector.
Segun Kuti-George, the Vice President of NASSI, indicated that the decline reflects genuine market changes. He cited the reduced prices of staple foods and enhanced fuel availability as key factors that have helped to lower both transportation and production costs across the economy.
Kuti-George specifically pointed to developments in the energy sector as a significant contributor to the easing of inflation. He noted that fuel prices decreased in December, supported by improved availability of petroleum products. This had a direct impact on reducing transportation and production expenses.
“We observed a drop in the price of fuel and other petroleum products, coupled with their availability,” Kuti-George remarked. “This made a substantial difference, as typically during December, scarcity drives prices up. However, this time, the situation was reversed.”
