December inflation projected to between at 32.4, 33.6%

Afrinvest has said that Nigeria’s headline inflation rate will rise sharply to 33.6% in December 2025 as base effects are set to disrupt an eight-month disinflation trend. But investment firm AIICO Capital Limited said, it would surge by at least 1700 basis points (bps) to a range of 31.4% and 32.4%, citing base effects and year end spending.

The projection suggests that Nigeria’s 8-month disinflation will be halted in December ahead of the statistic office report this week. Ahead of the National Bureau of Statistics (NBS) report, Afrinvest Limited dropped a hint that the consumer price index (CPI) would worsen by 19.15%, from a 14.45% inflation reading in November 2025 to 33.6%.

In its update, Afrinvest stated that leading into December, Nigeria had recorded eight consecutive months of disinflation between April and November 2025. Over this period, the headline inflation rate – a composite measure capturing food, energy, and core price movements – declined steadily from 24.2% year on year in March to 14.5% in November.

The firm noted that 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. Afrinvest said 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.

AIICO Capital Limited The expected CPI data will show how Nigeria has dealt with increase in goods and services over the past year since rebasing to December 2024 prices.

AIICO Capital Limited said its findings suggest that the headline inflation rate – which is a measure of the average change in the price level of both food and non-food items – will increase faster by a minimum of 1700 bps to a range of 31.4–32.4% year on year from 14.45% in the month of November.

“We believe the sharp increase will be largely driven by the base-year effect from both the core, or non-food items price, and food inflation.
“Our position is based on the base year effect on the components of the headline inflation – core and food inflation – as well as festive season spending on the overall price in December.

“Our analysis indicates that core inflation, which reflects changes in the average price of non-farm produce, is expected to ease by a minimum of 10bps to 1.0 – 1.2% m/m and increase by a minimum of 1510bps to 32.50 – 32.60% y/y”, the firm stated.

According to AIICO Capital, the month-on-month easing is expected to be driven by two major factors, Naira appreciation and reduced petrol price in December.

Analysts said that the naira appreciated by ₦10.98 per dollar to ₦1,435.76 per USD at the official window, although it depreciated marginally by ₦5.00 to ₦1,475.00 per USD in the parallel market.

In addition, average petrol prices declined by 14.7%, from ₦890 per litre to ₦759.5 per litre, following a 16% reduction in gantry prices to ₦699 per litre by a major domestic refiner, Dangote Refinery. The food inflation price index, which reflects changes in the average price of farm produce, is expected to increase by 5bps to a range of 1.2-1.5% m/m and by 1800bps 29.1- 29.9%y/y in December, compared to 1.1% m/m and 11.08%% y/y in November.

This acceleration would be driven by festive season effect and reduction in food supply chain amid dry season effect, AIICO Capital Limited said in its pre-inflation report.  Analysts expect festive season and base year effect to push the inflation rate to a minimum of 1.1 -1.3% m/m and 31.4v– 32.4%y/y.

“In addition, the food inflation price index, which reflects changes in the average price of farm produce, is expected to increase by 5bps to a range of 1.2-1.5% m/m and by 1800bps 29.1- 29.9%y/y in December, compared to 1.1% m/m and 11.08%% y/y in November.

“This acceleration would be driven by festive season effect and reduction in food supply chain amid dry season effect. Overall, we expect festive season and base year effect to push the inflation rate to a minimum of 1.1 -1.3% m/m and 31.4v– 32.4%y/y”, AIICO Capital stated.