By: Odiaka Olika

Between December 2024 and December 2025, Nigeria’s headline inflation rate fell from 34.80 per cent to 15.15 per cent. Food inflation, the component that governs the lives of the poor, fell from 39.84 per cent to 10.84 per cent. On any conventional reading, that is one of the fastest disinflations in the country’s post-independence record, and the government has understandably treated it as vindication of the 2023 reforms.

Over roughly the same period, the share of Nigerians living below the national poverty line rose from 61 per cent to 63 per cent, or about 140 million people, according to the World Bank’s April 2026 Nigeria Development Update. In 2023 the figure was 56 per cent.

Prices decelerated. Poverty deepened. Both statements are true, and the failure to hold them together is about to become the organising confusion of Nigeria’s 2027 election.

The incumbent case will be the chart. The opposition case will be the market. Each side will accuse the other of lying, and each will be describing something real. What neither is likely to do, unless the terms of the argument are set now, is explain why a single national number cannot settle the question it is being asked to settle.

Disinflation is not relief

The most consequential error in Nigeria’s economic conversation is the treatment of inflation and the cost of living as the same variable. They are not.

Inflation is the rate at which the general price level is changing. It is a first derivative. The price level is a level. Consider a basket costing ₦100,000 that rises 30 per cent in one year to ₦130,000, then 20 per cent to ₦156,000, then 10 per cent to ₦171,600. The inflation rate has collapsed from 30 per cent to 10 per cent. The household is still paying ₦171,600 for what once cost ₦100,000.

Disinflation means prices are rising more slowly. Deflation means the price level is falling. Nigeria has experienced the first. It has not experienced, and should not want, the second.

This matters because the price level has a memory. The transporter who raised fares when diesel repriced does not lower them because the year-on-year rate moderated. The landlord who reset rent to a new construction and financing cost does not reset it downwards. The trader prices off replacement cost, not off the NBS release. The statistical system measures the rate of change. Households live in the level. A disinflation, on its own, does not return a single naira of lost purchasing power. It only slows the rate at which more is taken.

That is the first reason the World Bank can report rising poverty in the same year the NBS reports falling inflation, and neither be wrong.

The lens changed while the picture was being judged

The second reason is measurement itself, and here the argument requires more discipline than either side of the coming campaign will want to exercise.

In January 2025 the NBS rebased the Consumer Price Index, replacing a 2009 reference structure with a 2023 weight reference period and a 2024 price reference period, covering 934 product varieties across 13 divisions under COICOP 2018. Headline inflation, reported at 34.80 per cent in December 2024 under the old framework, was reported at 24.48 per cent for January 2025 under the new one.

This was overdue and correct. Nigeria’s basket had not been reweighted in fifteen years, against a United Nations recommendation of roughly five. A basket frozen through a currency unification, a subsidy removal and a structural shift in household spending is not a neutral instrument; it is a distorting one. In January 2026 the NBS went further, moving to a twelve-month average reference period rather than a single base month. The International Monetary Fund endorsed both changes as consistent with its 2020 CPI Manual and the ECOWAS harmonised framework.

The rebasing was not manipulation. That allegation is unsupported and those who make it should stop.

But it is equally unsupported to claim that nothing happened to the number. Two things did.

First, the composition of the index moved substantially. Using the NBS weight tables, food and non-alcoholic beverages fell from 51.8 per cent of the basket to 40.1 per cent; housing, water, electricity, gas and other fuels fell from 16.7 per cent to 8.4 per cent; transport rose from 6.5 per cent to 10.7 per cent; and restaurants and accommodation services rose from 1.2 per cent to 12.9 per cent. Second, the methodological switch to a twelve-month reference period revised some published readings materially: November 2025 was restated at 17.33 per cent against an earlier 14.45 per cent, in that instance upwards.

Nigeria therefore changed the instrument in the same window in which the instrument was being used to grade the reforms. That is not a scandal. It is an interpretive problem, and the remedy is decomposition, not denial. When headline inflation moves, the NBS and the Central Bank should publish how much of the move is attributable to underlying price pressure, how much to exchange rate pass-through, how much to base effects, and how much to the weighting and methodological changes. A statistic whose components cannot be separated by independent analysts will eventually be believed by no one, whatever its arithmetic.

An index of the average Nigerian, who does not exist

The deeper limitation is distributional, and it survives even a perfectly executed rebasing.

Look again at those weights and ask who they describe. A basket in which restaurants and accommodation services carry 12.9 per cent, and housing and utilities 8.4 per cent, is a plausible description of aggregate national consumption. It is not a description of a household on ₦70,000 a month, for whom prepared food and hotels are close to zero and shelter is closer to a third of everything.

This is not a flaw in the CPI. The CPI was built to measure the change in the general price level across a representative national basket, and it does that. It was never built to answer whether a full-time worker can feed a family. Those are different questions, and Nigeria has spent three years asking the first while claiming to have answered the second.

The consequences are not academic. The World Bank’s own explanation for rising poverty during disinflation is that growth has come from services and industry while agriculture, which employs more than half of Nigeria’s poor, has lagged. Real incomes at the bottom did not recover even as the aggregate price series improved. A statistical system that reports only the aggregate will keep missing exactly the households whose distress determines elections.

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What ₦70,000 buys in August 2026

The statutory minimum wage is where this stops being theoretical.

In July 2024 Nigeria raised the national minimum wage from ₦30,000 to ₦70,000 and shortened the statutory review cycle from five years to three. In nominal terms that is a 133 per cent increase. In purchasing power terms, take the NBS’s own price monitoring: the national average pump price of petrol was ₦1,596.25 per litre in May 2026, up 55.31 per cent from ₦1,027.76 a year earlier. Sixty litres costs about ₦95,775. The entire statutory monthly wage buys roughly 44 litres.

The point is not that a minimum wage earner fills a 60-litre tank. It is that a full month of legally guaranteed income no longer covers one tank of the commodity that prices Nigerian transport, logistics, agricultural distribution and small-business power generation. Diesel averaged ₦3,277.47 per litre in May, up 86.40 per cent year on year. Refilling a 5kg cooking gas cylinder averaged ₦8,706.93 in April. Nothing has yet been spent on food, rent, school fees or medicine.

And the disinflation itself is now reversing. Headline inflation has risen in three of the last four reported months, from 15.06 per cent in February to 15.93 per cent in May, easing only marginally to 15.91 per cent in June. Petrol went from ₦1,051.47 in February to ₦1,596.25 in May on the back of the Strait of Hormuz disruption and crude above $100. The pass-through from that energy shock into food and transport has not finished arriving. The candidate who campaigns in 2027 on the 2025 inflation chart may find the chart has moved.

The wage review and the election arrive together

The statutory review of the ₦70,000 wage falls due in 2027. Organised labour has not waited: the NLC and TUC opened their push for renegotiation in July 2026, the Joint National Public Service Negotiating Council formally demanded ₦154,000 in March 2026, and the unions have said they are drafting a charter of demands to which they will hold 2027 candidates.

Nigeria has run this film before. In 2024 labour opened at ₦615,000, government countered at ₦62,000, and the parties landed on ₦70,000. The number was a product of relative bargaining strength, a threatened strike and a fiscal ceiling. It was not derived from any published estimate of what a Nigerian worker needs. Three years later, inflation has done its work and the same confrontation reconvenes, now inside an election campaign, with the same absence of an agreed benchmark.

Five measures, and the one that matters most

Publish inflation by expenditure decile, monthly. Statistics South Africa already reports inflation by province and by expenditure band, which is how South Africans know that their poorest households typically face higher effective inflation than their richest. Nigeria has the microdata to do the same. A low-income household index and a minimum-wage household index, published beside the headline rate, would end most of the credibility argument in a single release.

Publish a personal inflation calculator. Stats SA runs one. A Nigerian version, into which a household enters its own spending on food, transport, rent, energy, healthcare and school fees, would not replace the CPI. It would let citizens see why their experience differs from the national average, which is the fastest available route to restoring trust in the NBS.

Publish the basket, then set the wage. Nigeria should define a National Living Wage Benchmark: the transparently costed monthly expenditure required for a full-time worker to meet food, shelter, transport, energy, water, basic healthcare, communications, clothing, education costs and a modest provision for emergencies. Publish it monthly against the statutory wage, and the gap becomes a measured indicator rather than a slogan. On the evidence of purchasing power deterioration since 2023, that benchmark is likely to sit in a ₦150,000 to ₦200,000 range in higher-cost environments, which is why labour’s ₦154,000 demand is a reasonable opening rather than an outrageous one. But the figure should follow the basket, not precede it. Any number announced before the basket is published is politics.

Index annually, in a band, with regional adjustment. A three-year cycle is too blunt for an economy with this inflation variance; the wage is eroded silently between reviews and then recovered in a crisis. The formula should be cost-of-living change plus a productivity adjustment, subject to an employment and fiscal sustainability test, with a national statutory floor and a published regional living cost index. Lagos and Kebbi should not be pretended into the same cost structure.

Decompose every headline move. Price pressure, exchange rate pass-through, base effects, weights, methodology. Separately. Every month.

The productivity condition

None of this licenses the idea that Nigeria can legislate its way to higher real wages. It cannot. A wage increase financed through monetary expansion can add inflationary pressure, while borrowing that adds demand without corresponding productive capacity can do the same. A wage increase supported by rising output per worker, stronger revenue mobilisation, reduced leakages and an expanding formal productive base is fundamentally different. The financing mechanism and the state of productive capacity are the whole question, and the reflex claim that any wage increase must be inflationary is as lazy as the claim that none can be.

The durable answer is production: more processing of Nigerian agricultural output, gas into petrochemicals and fertiliser, domestic mineral beneficiation, manufacturing capable of competing across the African Continental Free Trade Area and beyond. Exports earn the foreign exchange that pays for the machinery that raises productivity that funds the wage. Industrial policy is wage policy. Every other route is a treadmill.

The test

Macroeconomic stabilisation is necessary. It is not the objective. The objective is whether a person who works full time can afford a basic and dignified life from that work.

Nigeria should protect the NBS, resource it, and hold it to a standard of transparency high enough that its numbers cannot be conscripted by any campaign. But protecting the statistician does not require pretending that one number answers every question. Falling inflation with rising poverty is not a contradiction to be explained away. It is a measurement gap to be closed.

Ahead of 2027, the temptation for the government is to run on the chart, and for the opposition to deny the chart. Both are evasions.

The serious question is the one no Nigerian politician has yet been forced to answer with evidence: what does a basic life in this country cost, and how far short of it does a lawful full-time wage now fall?

Publish that number, monthly, and the politics of numbers gives way to something harder and better: accountability.

•Olika is the Managing Partner of Axe & Scolfield Capital, a Strategic Finance and Investment Banking Advisory Firm.