The National Bureau of Statistics has announced plans to adjust Nigeria’s inflation figures for December 2025 following projections of an artificial spike in the Consumer Price Index driven by technical base effects rather than actual changes in the economy.
The decision was disclosed on Monday during a virtual stakeholders engagement convened by the NBS and the Nigerian Economic Summit Group, where officials explained that the expected surge in inflation stems from the recent rebasing of the CPI series and not from underlying economic pressures.
Multiple economic analysts have projected that headline inflation for December could climb to between 31.4 and 32.4 per cent year-on-year, a significant jump attributed to statistical complications arising from the adoption of a new base year for inflation measurement.
Statistician General of the Federation and Chief Executive Officer of the NBS, Adeyemi Adeniran, confirmed that the projected spike is linked to the rebasing of the CPI, which adopted 2024 as the new base year after a 15-year gap from the previous 2009 base. He emphasised that base effects are a standard feature of statistical practice, particularly in index-based measurements, and are neither unexpected nor unusual.
“Following the rebasing exercise and the methodology adopted for December 2025, a significant artificial spike in the inflation rate is expected, as some analysts have already projected. This spike arises from the base effect, with December 2024 equated to 100 following the rebasing,” Adeniran stated, according to remarks made during the engagement.
“Base effects are common in statistical practice, particularly when comparing data across periods with unusually high or low prices. They are neither unexpected nor unusual. However, when such effects occur, especially when they are artificial and arithmetic rather than reflective of structural changes in the economy, it is essential to clearly communicate and explain them to users,” he added.
Adeniran said the Bureau’s decision to address the issue proactively was guided by principles of transparency and accountability, noting that the NBS sought to provide a clear picture of actual price changes rather than simply reporting an artificial spike that does not reflect economic realities.
“Transparency requires that we provide a clear picture of actual price changes rather than simply reporting an artificial spike that does not reflect economic realities. This is why we convened this meeting to inform our critical stakeholders and users of our data,” he said.
Nigeria’s inflation measurement has undergone significant transformation in recent months, with the NBS conducting its first CPI rebasing in 15 years. The exercise, which updated the consumption basket and reference period, introduced over 400 new products into the CPI basket while removing more than 200 items deemed no longer representative of household spending patterns. The rebased CPI now includes 934 products organised under a 13-division Classification of Individual Consumption According to Purpose framework.
The rebasing process, while necessary to reflect contemporary consumption patterns, has created methodological challenges, particularly in linking the new CPI series to the old one for the purpose of calculating year-on-year inflation rates. The decision to set December 2024 equal to 100 as the reference point for the rebased index has introduced the base effect that officials are now seeking to address.
In his opening remarks at the session, the Chief Executive Officer of the Nigerian Economic Summit Group, Dr Tayo Aduloju, underscored the growing importance of credible inflation data as Nigeria transitions from economic stabilisation to consolidation.
“As the economy shifts from stabilisation reforms to consolidation reforms, the role of official statistics, especially the CPI, becomes not less important, but very, very crucial,” Aduloju said.
He noted that preliminary assessments suggest inflation figures could record temporary technical spikes, stressing that such outcomes should be carefully interpreted to avoid policy errors.
“During periods of acute instability, headline inflation serves as an alarm bell. But as we move from managing crisis to managing growth, CPI statistics must help us understand inflation dynamics properly, not just react mechanically to headlines,” Aduloju stated.
He warned that misleading inflation signals during the consolidation phase could undermine hard-won economic gains, adding that policy errors at this stage could prove costly.
“In this phase of macroeconomic transition, policy errors can be very costly. Credible CPI statistics anchor policy coherence, guide monetary policy calibration, inform fiscal planning, shape wage negotiations, and influence investment decisions,” he said.
The technical presentation at the engagement was delivered by the Director of Price Statistics at the NBS, Dr Ayo Anthony, who detailed the methodological challenges created by the rebasing exercise and the steps being taken to resolve them.
“The last CPI rebasing was done in 2009, and ideally this exercise should be carried out every five years. Because of this 15-year gap, consumption patterns changed significantly, leading to the introduction of over 400 new products into the CPI basket and the removal of more than 200 items,” Anthony said.
He explained that linking the new CPI series to the old one created unavoidable statistical complications, particularly in the computation of year-on-year inflation rates.
“To compute year-on-year inflation, we had to link the rebased CPI to the old series. Using December 2024 equal to 100 allowed that linkage, but it also introduced the base effect we are now seeing,” he said.
Anthony warned that without adjustment, the December 2025 inflation figure could appear significantly inflated, not because of genuine price increases but due to arithmetic effects.
“For transparency and accountability, we are engaging stakeholders to explain the statistical solution, which aligns with global best practice. Projections show that without adjustment, December year-on-year inflation could appear excessively high due solely to arithmetic base effects, rather than underlying economic conditions,” he stated.
To address the issue, the NBS will apply a normalisation process in line with the CPI Manual 2020, specifically Chapter 9, Section 9.125, which recommends the maximisation of the index reference period. Under this approach, instead of using December 2024 as the sole reference point with an index value of 100, the average CPI from January to December 2024 will be set to equal 100.
“This adjustment removes the artificial base effect and presents a more accurate picture of inflation dynamics. While this adjustment affects published figures for January to December 2025, the impact is not significant and will be clearly communicated to stakeholders,” Anthony explained.
He emphasised that the Bureau is committed to full disclosure, noting that the NBS will still make reference to the artificial spike in its reports to maintain transparency.
“We are not hiding anything. For transparency, we will still make reference to the artificial spike in our reports,” Anthony said.
The NBS official also revealed that the decision was not made in isolation, stating that technical partners, including the International Monetary Fund, the World Bank, and the Central Bank of Nigeria, were consulted in arriving at the decision.
Looking ahead, Anthony noted that the base effect would no longer apply from January 2026, as inflation calculations would rely solely on the rebased CPI basket without the need for linking to historical data.
“From January 2026 onward, the base effect will no longer apply, as comparisons will be made using actual index values from the rebased basket,” he said.
The engagement also provided an opportunity for the NBS to underscore the importance of regular rebasing of macroeconomic indicators. Anthony pointed to the 15-year gap between rebasing exercises as a contributing factor to the current statistical complications.
“The key lesson here is the need to rebase CPI and GDP as at when due. When rebasing is done every five years, we avoid these unusual distortions,” he said.
