CPPE: Changes in CPI Computing Methodology Raises Credibility Concerns over December Inflation Data

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise (CPPE) pointed out that recent changes in the methodology for computing the Consumer Price Index (CPI) have raised concerns about the credibility of the latest inflation data.

It made this observation yesterday in its “Policy Brief on Nigeria’s December 2025 Inflation” figures.

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, noted that “inflation is moderating, but data credibility is weakening.”

Yusuf added: “The decline in inflation suggests that macroeconomic stabilisation efforts are beginning to take effect.

“However, adjustments to CPI computation parameters have created credibility gaps, undermining the confidence of investors, analysts, businesses, and policymakers.”

He, therefore, advised that the policy focus should be on strengthening the technical capacity and analytical rigour to rebuild trust in statistical outcomes.

He said: “Review and improve CPI methodology to ensure alignment with economic realities.”

Yusuf advised the National Bureau of Statistics (NBS) to strengthen its, “institutional capacity for data accuracy and quality assurance and improve technical and analytical rigour in CPI computation” to “rebuild public and investor confidence in statistical outcomes.”

According to him, the December 2025 inflation data confirmed that Nigeria’s inflation was moderating, driven largely by a decline in food prices, which is a positive development for households and economic stability.

“However, sustaining this progress requires urgent action to address structural cost pressures, support agricultural producers, and restore confidence in inflation data.

“Without these measures, the gains in affordability and price stability may not endure,” Yusuf said.

He pointed out that Nigeria’s inflation declined to 15.15 per cent in December 2025, which extended the disinflation trend recorded over the past 12 months.

He noted that the moderation was driven largely by falling food prices, which have provided some relief to households.

“Food inflation fell sharply to 10.84 per cent, and month-on-month food prices contracted. This has been the single biggest contributor to easing the cost-of-living pressures on Nigerian households.

“Despite exchange-rate stability, core inflation increased to 18.63 per cent.

“This is inconsistent with macroeconomic fundamentals and suggests deeper structural pressures or possible statistical inconsistencies,” Yusuf said.

He pointed out that the sharp decline in food prices has created serious concerns about the sustainability of farmers’ investments, as their returns are being eroded.

He said addressing affordability for consumers and investment viability for producers was now an urgent policy priority.

“The good news is that the Coordinating Minister for the Economy, Mr. Wale Edun, has indicated that the government is addressing this challenge,” he said.      

According to the CPPE, while consumers benefit from lower food prices, farmers face declining incomes amid rising input costs, which could risk discouraging agricultural investment and threatening long-term food security.

Yusuf advised the government to reduce the cost of fertilizers, agrochemicals, and machinery, as well as expand irrigation and mechanisation support.

The CPPE identified the following drivers of inflation as high energy and fuel costs, rising transportation and logistics expenses, insecurity affecting agricultural output, high interest rates and credit costs, and import duties on key production inputs.   

It stated further that sustaining the inflation decline would require closer alignment between fiscal and monetary authorities.

“Structural interventions must complement monetary tightening to reduce inflation without weakening production,” CPPE added.