Inflation falls to a five-year low, but Nigerians still feel economic strain

Nigeria’s inflation rate has dropped to 15.15% in December 2025, down from 34.80% a year earlier, marking eight consecutive months of decline and reaching the lowest level since October 2020. Yet nearly two years into President Bola Tinubu’s economic reforms, many citizens say they’re still struggling with the cost of living.

The dramatic improvement in official statistics contrasts sharply with the daily experiences of ordinary Nigerians, creating a disconnect that economists say threatens public support for ongoing reforms.

Fuel pricing has been particularly volatile. In December 2024, competition between the Dangote Refinery and NNPC drove prices down to as low as N699 per litre at the refinery gate, with some filling stations selling at N739. The Nigeria Labour Congress Lagos Council praised this as timely economic relief.

By April 2025, however, prices had surged to N950 per litre due to rising global crude oil costs, frustrating Nigerians who had hoped local refining would bring stability.

“One month fuel is N700, the next month it’s N950. How do we plan our lives?” asked Chioma Okafor, a Lagos trader. “The numbers keep changing, but transport costs never seem to go down for long.”

Commercial drivers across Lagos, Abuja and Port Harcourt say the price swings make it difficult to set fares, leaving both operators and passengers uncertain.

Government officials point to substantial macroeconomic gains as evidence the reforms are working. The fiscal deficit has dropped from 5.4% of GDP in 2023 to 3.0% in 2024, while foreign reserves surged from $4 billion to over $23 billion. Economic growth reached 3.4% in 2024, the highest annual rate since 2014.

NLC President Joe Ajaero acknowledged some improvements but warned that workers have become poorer overall due to the cumulative impact of price increases during the peak inflation period of 2024. Transport costs, food prices and rent all rose sharply before the recent moderation in inflation.

“Inflation falling from 35% to 15% is progress, but it doesn’t mean prices are falling—they’re still rising, just more slowly,” explained Dr. Adewale Bakare, an Abuja-based economist. “People who saw transport costs triple in 2024 aren’t feeling relief because increases have slowed.”

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Market traders and workers interviewed across major cities expressed frustration with the gap between official data and personal experience. While they understand the economic logic behind subsidy removal and market-based pricing, the promised household-level benefits remain elusive.

“Government shows us charts and percentages, but I show you my empty pocket,” said Musa Ibrahim, a commercial bus driver in Abuja. “That’s the only number that matters to me.”

The Dangote Refinery, expected to stabilize fuel supply and pricing by eliminating import dependence, has produced mixed results. While its December 2024 entry created price competition, the April 2025 surge showed that local refining alone cannot insulate Nigeria from global oil market dynamics.

With inflation now trending downward and some economic indicators improving, government officials express optimism that 2025 will be the year macroeconomic gains translate into tangible household relief. However, continued fuel price volatility and persistent affordability challenges suggest the administration’s task is far from complete.

For ordinary Nigerians, the test remains straightforward: can they afford to feed their families, get to work and pay rent? Until the answer is consistently yes, reform fatigue will continue to overshadow even impressive economic statistics.

As President Tinubu’s administration approaches the halfway point of its first term, bridging the gap between macroeconomic success and household-level improvement has become its most critical challenge.