Inflation Falls to 15.15% , Nigeria-UAE Sign Trade Agreement and World Bank Upgrades Growth Forecast

The noise doesn’t stop, but the patterns do emerge if you’re watching closely enough. We’ve sifted through the numbers, traced the policy moves, and connected the dots so you don’t have to spend your week doing it. Here’s what shaped the week and what it actually means 📊

Nigeria’s headline inflation fell to 15.15% in December 2025, down from 17.33% in November and a sharp drop from the 34.80% recorded in December 2024, according to the latest Consumer Price Index report released by the National Bureau of Statistics on January 15, 2025📉. The Consumer Price Index rose to 131.2 points in December from 130.5 points in November, reflecting a 0.7-point increase 📊.

Earlier in the week, the NBS had warned that December’s inflation could spike artificially to over 30% due to a technical quirk in how the rebasing was done 🔧. Here’s what happened. When the NBS rebased the CPI in early 2025, they set December 2024 as the baseline month at 100 points, 📏,so all of 2025 got measured year-on-year against just December 2024, which made inflation look lower throughout the year than it would have if the entire 2024 series had been rebased consistently 💡. When December 2025 finally arrived and got compared to the rebased December 2024, both months were suddenly on the same measurement scale for the first time, which produced an artificial spike of 30–32% that had nothing to do with prices actually jumping 📈. 

The NBS fixed this by recalculating all the months in 2025 using a twelve-month average for 2024 instead of just December 2024 alone, using what they call a “12-month index reference period” where the average CPI for the 12 months of 2024 is equated to 100 🔧. That’s why November’s inflation got revised upward from the previously reported 14.45% to 17.33% under the new calculation method, and why December came in at 15.15% instead of the projected 30%+ spike 📊.
What this means is that the disinflation trend that started in April 2025 is real and continued through December, bringing inflation from over 34% down to 15% by year end ✅. The inflation series is expected to normalize from January 2026 and it is important to note that the month on month (MoM) inflation figures are not affected by this statistical change and remain intact.
It’s like comparing this year to last year using one photo as the reference. Once the full album was used, the comparison stopped looking dramatic. 📸📊

Now to the details of what’s actually happening with prices 💰. Food inflation dropped to 10.84% year-on-year in December from 11.08% in November and a massive decline from 39.84% in December 2024 🌾. On a month-on-month basis, food prices actually fell by 0.36% in December compared to a 1.13% increase in November, marking a reversal driven by lower prices for tomatoes, garri, eggs, potatoes, carrots, millet, vegetables, plantain, beans, wheat grain, ground pepper, and fresh onions 🍅. The twelve-month average food inflation rate stood at 22.00% 📊.
Core inflation, which excludes volatile food and energy prices, stood at 18.63% year-on-year in December, down from 18.04% in November and significantly lower than 29.28% in December 2024 💸. Month-on-month core inflation moderated to 0.58% in December from 1.28% in November, while the twelve-month average core inflation rate remained elevated at 23.49% 📈. The newly introduced sub-indices showed that energy inflation increased significantly by 2.74% month-on-month in December, while farm produce prices fell by 0.41%, services rose by just 0.15%, and goods increased by 0.64% 🔌. Month-on-month headline inflation moderated to 0.54% in December from 1.22% in November, indicating easing short-term price pressures 📉.
Urban inflation stood at 14.85% year-on-year in December compared to 13.61% in November, while month-on-month urban inflation edged up slightly to 0.99% from 0.95% 🏘️. Rural inflation came in at 14.56% year-on-year compared to 15.15% in November, with month-on-month rural inflation falling by 0.55% in December after rising 1.88% in November 🌾.
Food and non-alcoholic beverages remained the largest contributor to headline inflation, accounting for 6.06 percentage points of the year-on-year figure, followed by restaurants and accommodation services at 1.96 percentage points and transport at 1.62 percentage points 🚗. The smallest contributors were recreation, sport, and culture at 0.05 percentage points, alcoholic beverages and tobacco at 0.05 percentage points, and insurance and financial services at 0.07 percentage points 📋. With the statistical adjustment done, inflation remains a key metric to watch in the new year.

Nigeria and the United Arab Emirates signed a trade deal on January 13 that eliminates tariffs on thousands of products flowing between both countries 🌍. The Comprehensive Economic Partnership Agreement formalizes a relationship that already sees over $4.3 billion in annual trade and is designed to make it easier for Nigerian businesses to operate in the UAE and for UAE investors to put money into Nigeria 💼.

Nigeria will remove tariffs on 6,243 products imported from the UAE, with nearly two-thirds (3,949 products) getting zero tariffs immediately and the rest phased out over five years 📦. The UAE will eliminate tariffs on 7,315 Nigerian products, with 2,805 going to zero immediately, 1,468 over three years, and 3,042 over five years 🛢️. For Nigerian exporters, this means immediate duty-free access to the UAE market for fish, cereals, oil seeds, fruits, leather, cotton, pharmaceuticals, chemicals, paper, footwear, and cosmetics 🌾. Products like cocoa, coffee, mineral fuels, machinery, vehicles, and apparel will see tariffs removed gradually over the next few years 🚗.

Beyond goods, the agreement opens up services 💡. Nigerian businesses can now set up companies, branches, and subsidiaries in the UAE, and Nigerian professionals can enter the UAE for 90 days within a 12-month period to explore business opportunities or transfer within their companies for renewable three-year periods ✈️. The UAE committed to opening 108 service categories across 11 sectors, including banking, insurance, engineering, hospitality, entertainment, retail, telecommunications, and construction 🏦.

Nigeria excluded 123 products from the deal to protect domestic industries, mainly meat, dairy, vegetables, vegetable oils, cereals, tomato paste, alcoholic beverages, soap, and certain textiles 🚫. The Import Prohibition List stays in place, meaning this agreement doesn’t override existing trade restrictions 📋.

What this does is give Nigerian exporters of gold, agricultural products, and manufactured goods easier access to a wealthy Gulf market while making it simpler for UAE investors to finance gas-to-power projects, agriculture, and infrastructure in Nigeria 💰. It also addresses longstanding problems like airline funds stuck in Nigeria and foreign exchange bottlenecks that have frustrated businesses on both sides 🔧. Think of it as removing speed bumps from a road that was already being traveled—the trade was happening, but now it should flow faster and with fewer headaches 🛣️⚖️.

The Federal Government plans to raise ₦189 billion in 2026 by selling off 91 federal assets 💰. While the specific assets for sale were not detailed in the appropriation bill, the Bureau of Public Enterprises confirmed that 91 federal assets are earmarked for privatization or commercialization, spanning oil and gas (16 assets including refineries and depots), agriculture (12), aviation (20), and other sectors (43) 🛢️. Of these, 35 will be fully privatized while 57 will undergo partial privatization 🏭.
The government is essentially saying it will sell assets to raise money for the budget, but ₦189 billion against a ₦25 trillion financing gap is like trying to fill a swimming pool with a garden hose 🏊‍♂️💧. The real question is whether these assets will actually sell at the projected values, and whether the proceeds will be used for capital projects or simply absorbed into recurrent spending 💡⚖️.

Nigeria is on track to spend over ₦91 trillion on debt service between 2023 and 2028, with annual payments climbing from ₦8.56 trillion in 2023 to a projected ₦19.8 trillion in both 2027 and 2028 📈. Meanwhile, actual capital spending keeps falling short 📉. In 2023, capital projects got ₦6.3 trillion while debt service took ₦8.56 trillion. In the first seven months of 2025, capital spending was ₦3.59 trillion against a pro-rated expectation of ₦13.6 trillion 💸. Domestic debt ballooned from ₦54.3 trillion in 2022 to ₦80.5 trillion, external debt rose from $41.6 billion to $46.9 billion, and borrowing costs are running above 20% 🏦. At the moment, the budget might just be focused on paying yesterday’s bills faster than it’s funding tomorrow’s plans. 🧾📊

The World Bank upgraded Nigeria’s growth forecast to 4.4% for both 2026 and 2027, up from earlier estimates of 3.7% and 3.8%, making it the fastest expansion pace in over a decade 📈. The Bank also raised its 2025 growth estimate to 4.2% from 3.6%, citing stronger performance in services, modest agricultural recovery, and Nigeria’s emergence as a net exporter of refined petroleum 🌍. Growth is being driven increasingly by finance, information technology, and other service sectors rather than just oil 💼. But the Bank added a critical caveat—sustaining this momentum depends on tackling weak fiscal discipline and institutional capacity, the same structural problems that have undermined Nigeria’s ability to manage oil revenue volatility in the past 🔧.
A 4.4% growth forecast is encouraging, especially when it’s driven by services and non-oil sectors rather than just oil price windfalls 💡. But the World Bank’s caveat about fiscal discipline and institutional capacity is where the rubber might meet the road 🚗.

According to the latest OPEC Monthly Oil Market Report, Nigeria’s crude oil output slipped to 1.422 million barrels per day in December from 1.436 million in November, missing the country’s OPEC quota of 1.5 million barrels per day for the fifth straight month🛢️. The 2026 budget assumes Nigeria will produce 1.84 million barrels per day 💰. Current reality is 1.42 million 🛢️. That’s a 420,000 barrel-per-day gap between what the budget needs and what the oil sector is delivering 📋.
With revenue plans assuming oil output that hasn’t shown up yet, the numbers seem to be running ahead of the barrels 💸📉⚖️.

So, what now?

Track how these pieces connect because nothing happens in isolation 🔗.

📌 Quote of the Week

“The best way to predict the future is to create it.” 📊

Distilled. Decoded. Delivered.

See you next Friday. 🤝