IF you are a Nigerian, you have more money in your hands now than last month, as inflation dropped for the eight straight time in November 2025, implying that your purchasing power increased in November when compared to October.
Any time inflation declines, your purchasing power rises. If you bought a piece of cloth at N12,000 in July and the price declined to N6,000, it means you could use the same N12,000 to buy two pieces of cloth, rather than 1, in August.
The headline inflation dropped to 14.45 percent in November, representing a remarkable decline from 16.05 percent recorded in October, the National Bureau of Statistics (NBS) said on Monday.
“On a month-on-month basis, the Headline inflation rate in November 2025 was 1.22%, which was 0.29% higher than the rate recorded in October 2025 (0.93%). This means that in November 2025, the rate of increase in the average price level was higher than the rate of increase in the average price level in October 2025,” the NBS noted.
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If you live in cities like Lagos, Abuja or Port Harcourt, your cost of living declined last month, according to the NBS. This is because urban inflation rate stood at 13.61 percent in November from 13.79 percent in October.
For those planning to celebrate Christmas, this is the right time to do so, as food inflation, which measures the rate of increase in the cost of foods, dropped for the 5th straight time to 11.08 percent. This is a remarkable drop from 13.12 percent in October. This also means that prices of staples from rice to tomato fell remarkably at decreasing rates in Africa’s most populous nation, providing the much needed relief for households.
Why inflation is dropping
Economists have adduced reasons why inflation is dropping in Nigeria. First is the massive food importation embarked upon by the Nigerian government in 2024 in the face of escalating inflation. With Nigeria’s headline inflation rate at 33.40 percent in July 2024, the Nigerian government began the implementation of the zero percent import duty and exemption of value-added tax on basic food items.
In the circular entitled, ‘Approval for the implementation of zero percent duty rate on basic food items,’ the Nigeria Customs Service (NCS) said the Ministry of Finance had sent a letter to the service, informing the agency that President Bola Tinubu had approved the implementation.
The letter dated August 14, 2024, and signed by the Deputy Comptroller-General, C.K Niagwan, noted that the food commodities involved included maize, husked brown rice, wheat, grain beans, and millet.
The circuar read, “I am directed to forward herewith a copy of the Federal Ministry of Finance letter, confirming His Excellency, Mr President’s approval for the implementation of zero per cent duty rate and Value Added Tax exemption on some basic food items.
“You are to note the following, ‘the policy is restricted to the items listed in the letter and it is effective July 15, 24 until December 31, 24. The importation of these items shall be limited to investors with milling capacity and a verifiable Backward Integration Programme for some of the items.”
The food importation has continued up to this moment, thereby favourably competing with products of local farmers. Hence a combination of imports and inproved harvests have contributed to creating glut in some food markets.
“Farmers are complaining that they produce but cannot sell due to food glut. However, to the consumer, this is somehow great news because, once again, he can afford basic food items, thanks to this policy,” said a Lagos-based economist, Mr John Ewa.
“Secondly, there have been better harvests and supply chain improvements.” He also noted that the inflation decline was also driven by the recent rebasing.
“Another reason is the base effect. Rebasing changes weights and sometimes the basket of goods used in calculating inflation. The overall effect is that it lowers the headline figure.”
Yet another reason for the declining inflation is the increased local petrol refining, led by Dangote Petroleum Refinery, which is ramping up output. With increased local refining and lower imports, the price of petrol has moderated in recent times, falling from a peak of over N1,000 per litre last year to the gantry price of N699 per litre this week.
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Chief Executive Officer of Financial Derivatives, Mr Bismark Rewane, said that fallling inflation was fuelled by a firm disinflationary stance by the Central Bank of Nigeria (CBN), improvements in domestic refining capacity that could reduce volatility in fuel prices, stronger manufacturing output, rising productivity, and reforms aimed at lowering logistics and supply-chain costs.
With inflation easing, he noted an improvement in household purchasing power, which could, in turn, boost demand across retail, services and industrial sectors.
Why you are not yet feeling inflation declines
Inflation is technically falling, but you may not be feeling it, and here is why. The declining inflation does not always mean that prices are falling, but it means that there is decline in the rate at which they are falling.
For instance, If the price of a tuber of yam rises in November from N2,500 to N3,200, the rate of the price increase is N700 (N3,200 -N2,500). If, in December, the price rises to N3,400, the rate of increase will just be N200 (N3,400-N3,200). In this case, we can say that inflation has declined, even though the main price has risen or remains the same. This is what happens in many cases when inflation drops. However, there are also cases where prices fall in real terms (not the rate), which is often referred to as deflation.
