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When the National Bureau of Statistics (NBS) rebased the Consumer Price Index (CPI) in February 2025, headline inflation fell overnight from 34.80% to 24.48%. Yields compressed. Fixed income rallied. A question that should have been straightforward became almost impossible to answer: what is cash actually earning in Nigeria after inflation? 

We remember what the commentary said: “statistical fix”, “economic illusion”, “the cost of living is still high”, and “basket weights have shifted”. All of these are true. But nobody did the obvious next thing: build the bridge between the old series and the new one, then show what a continuous 15-year picture of Nigerian real returns actually looks like. 

We did.

Problem with two CPI series

The old NBS CPI used a November 2009 base and 740 items weighted by the 2003/04 Nigeria Living Standards Survey. The new methodology uses a 2024 average base, 934 items, and 2023 weights. Food and non-alcoholic beverages dropped from 51.8% to 40.1%. Restaurants and accommodation increased from 1.2% to 12.9%. A 13th division of the Classification of Individual Consumption According to Purpose (COICOP) was added (Insurance and Financial Services). That alone tells you how much the consumption basket has shifted.

 
These are legitimate improvements. Nigeria’s spending patterns have genuinely changed since 2009, and nobody disputes that. 

The problem is continuity. The NBS published no officially chain-linked historical series. The old index ended in December 2024. The new one kicked in from January 2025. Month-on-month rates don’t match across the boundary. Stops & Gaps, an analytical series on Nigeria's economy and financial markets, documents a particularly egregious discontinuity: the rebased index implies prices fell by 12.3% in a single month in December 2024. However, the actual largest single-month decline since 1995 was 3.5%. 

For anyone maintaining a time series (pension fund benchmarking, fixed income attribution, real return measurement), the data is broken. Every analyst in Lagos likely knows this. Therefore, many of them shrugged and moved on. 

Chain-linking: what we built and why 

We followed the International Monetary Fund’s (IMF) CPI Manual, Chapter 9, for linking series across base-period changes. December 2024 is the overlap month where both old-base and new-base CPI levels exist. The chain-linking factor comes out at 0.11523. We rescaled the entire old series onto the new base. 

The result: 204 continuous monthly CPI observations from February 2009 to January 2026. This represents 191 back-tested months on the old base, spliced to 13 live months on the new base. No interpolation. No estimation. Month-on-month rates are preserved through the splice point, and all calculations are reproducible using published NBS and CBN data. 

We paired this CPI series with the Central Bank of Nigeria (CBN) 91-day T-bill stop rates from primary auctions to construct the VNG CRR, the Venoble Nigeria Cash Real Return Index. Two inputs per month. NBS CPI level. CBN stop rate. Fisher equation. All compound into the index. 

The headline: over 204 months, Nigerian cash earned +9.48% annualised in nominal terms and −5.48% in real terms. This is consistent, cumulative, and structural destruction of purchasing power.

Put differently, N1 million invested in 91-day T-bills in February 2009 would be worth roughly N4.7 million in nominal terms as of January 2026. Adjust for what that money can actually buy, and the real value is closer to N380,000. The T-bill investor multiplied his digits and shrank his wealth. 

Why this matters now

Let’s start with pension fund allocation. Nigeria’s pension assets reached N26.66 trillion as of October 2025. Roughly 60% (c.N16 trillion) sits in FGN securities. If the annualised real return on government paper has been negative for 15 consecutive years, what does that mean for the 10 million holders of the Retirement Savings Accounts (RSAs)? The Organisation for Economic Cooperation and Development (OECD) flagged this in its 2024 pension report, which used 2023 data. Pension funds in Nigeria, Angola, and Egypt, where more than half of their assets are held in bills and bonds, delivered negative real returns. The National Pension Commission (PenCom) raised equity limits in February 2026: RSA Fund I from 30% to 35% and RSA Fund II from 25% to 33%. While this is indeed a step in the right direction, it is not enough. 

Then there is the visibility problem. Under the old methodology, a 91-day bill at 18% against 34.8% inflation was obviously underwater. Under the new CPI, the same bill at 15% against 15.15% inflation looks like a break-even. 

Did real returns improve, or did the statistical agency change the yardstick? In our view, both. Inflation has genuinely decelerated: monthly CPI growth dropped below 1.0% for several consecutive months in H2 2025. But the rebase also flatters the comparison by c.10 percentage points. Without a continuous series, you cannot separate the two effects. 

Nonetheless, the sign has flipped. From August 2025 through January 2026, the VNG-CRR recorded six consecutive months of positive real returns. January 2026 was the strongest at +4.39%. Month-on-month CPI fell by 2.88% while the nominal T-bill return was 1.38%. The real index climbed from 984 to 1,027, above its inception base of 1,000 for the first time. 

After 15 years of negative returns, real returns have turned positive. Whether this will be sustained is the question nobody can answer yet. 

What we do not know

We don’t have a strong view on whether the disinflation trend will persist. The December 2025 CPI base effect is messy. The rebased December 2024 level was set at 100, which creates arithmetic distortions in year-on-year comparisons as that month rotates out. Headline YoY inflation could spike artificially in December 2025 data even if underlying prices remain stable. Anyone anchoring allocation decisions to year-on-year headline numbers will get whipsawed. 

We also cannot tell whether the new CPI basket accurately captures the cost-of-living reality for the median Nigerian. Restaurants and accommodation at 12.9% may reflect urban middle-class spending in Victoria Island, Lagos and Wuse, in Abuja metropolis. It does not reflect what a civil servant in Kano or a smallholder farmer in Benue pays for food and transport. The CPI measures what it measures. It is not a cost-of-living index. That distinction matters more than most post-rebase commentary acknowledged, and it is the gap a continuous real return series is designed to fill. 

The allocation question 

Here is what the data does tell us. Over 204 months, the real return hurdle rate (the rate an alternative investment must beat just to match cash in purchasing-power terms) has been low – negative, in fact. Any asset class generating positive real returns has beaten cash. Equities: the NGX ASI returned 51.19% in 2025. Real estate in Lekki and Abuja Central Business District. Dollar-denominated instruments accessed through the Nigerian Autonomous Foreign Exchange Market (NAFEM). All cleared the hurdle. 

With real yields now positive, the calculus shifts. Cash is no longer guaranteed to destroy wealth. But 15 years of compounded losses do not reverse in six months. The real index is at 1,027. It needs sustained positive real returns to recover the purchasing power lost over the prior decade. 

For pension fund administrators and asset managers, the implication is straightforward: measure everything against the real return on cash. Not nominal yields. Not headline inflation. The actual, chain-linked, continuously compounded purchasing-power return. If your portfolio is not beating that number, you are losing money, regardless of what the nominal statement says.

Why independent benchmarks matter 

Nigeria possesses Africa’s largest consumer market by population size, and while its pension assets have consistently grown in local currency (naira), their total valuation in US dollars has fluctuated due to macroeconomic shifts and currency devaluations. However, the country’s data infrastructure for institutional investors is among the weakest on the continent. South Africa has inflation-linked bonds, a real repo rate published by the South African Reserve Bank, and a mature index ecosystem. Nigeria has a CPI series with a structural break and no official chain-linked alternative.

The gap is not in analytical capacity. There is no shortage of Nigerian research firms producing excellent work. The gap is infrastructure – auditable, rules-based benchmarks that any market participant can verify. This requirement is not met by either mere commentary or opinions about what inflation feels like. It is met by published, reproducible numbers. 

This is what we built the VNG-CRR to provide. It comprises two inputs, one equation, and one index, and is updated monthly. Its methodology is published. The data is downloadable. And every calculation is auditable against source data. What’s more, the analyses are completely free to the public. 

The CPI rebase broke the data. We built the unbroken picture because nobody else did. Whether the NBS eventually publishes its own chain-linked series or the market continues to rely on independent providers tells us something about the state of Nigeria’s capital market infrastructure. We do not think anyone in Abuja is losing sleep over it, but maybe they should be. 

Ejiye J. Ibhawoh is the Founder and CEO of Venoble Limited, an investment intelligence and capital management firm for African markets. He is a FINRA-qualified capital markets professional with a background spanning investment banking, trading, and software development. More at venoble.com.