Contending with rising costs amid static income

It is no longer news that in Nigeria, the cost of living is considered high, with a major gap between rising prices of goods and services and relatively stagnant incomes. This means that despite earning a salary, the purchasing power of individuals often decreases due to inflation, leading to a struggle to maintain a decent standard of living.

In 2024, with inflation and stagnant incomes, the living income for rural Nigeria was N307,691 ($208). In November 2024, inflation was 34.6 percent, the highest since 1999; the price of bread increased by 103.76 percent from October 2023 to October 2024. This was partly attributed to the Russia-Ukraine war that made global supply chain disruptions worse, which has increased costs.

“In spite of global economic inflation, the minimum wage in Nigeria remains at N70,000/month, and some states have not started paying till now.”

The primary factor impacting the cost of living is high inflation, causing prices of essential items like food, transportation, and housing to increase rapidly. Paradoxically, while the minimum wage has been adjusted to N70,000, it is still considered insufficient to cover basic living expenses in most parts of Nigeria.

Although the cost of living varies significantly depending on location, with major cities like Lagos, Abuja, Benin City, etc., generally being more expensive than rural areas, the combination of rising costs and stagnant income puts a strain on household budgets, often forcing people to make difficult choices about spending priorities.

Limited job opportunities, low wages in certain sectors, and a large informal economy contribute to the issue of stagnant income for many Nigerians. Irrespective of the sector, food prices have soared to unprecedented levels, driven by rising production costs, agricultural disruptions, and inflation. Staple items like rice, once a daily meal for many Nigerians, are now out of reach for the poor. At markets such as Abule Odu and Daleko in Lagos, a bag of rice costs N98,000 (foreign) or N88,000 (local). A crate of eggs now sells for between N5,800 and N6,000, while a five-litre bottle of vegetable oil is between N22,000 and N25,000.

Nigeria’s inflation rate rose to 34.6 percent in November 2024, the highest since the return to democracy in 1999. Basic items like bread and milk have doubled or even tripled in price over the past year, while incomes remain stagnant. The price of a loaf of bread that sold for N700 last year now costs up to N1,500. Real gross domestic product (GDP) growth has averaged just 1.4 percent over the past eight years, a sharp decline from the 6.5 percent growth seen in earlier decades.

The World Bank reports that 129 million Nigerians are now classified as poor, a dramatic increase from 104 million in 2023. The ongoing Russia-Ukraine war has compounded global supply chain disruptions, further escalating costs.

Read also: Rebased inflation rate does not resolve rising cost of living – LCCI

According to Nigeria’s Consumer Price Index (CPI), the rebased All Items index in January 2025 was 110.68, while the headline inflation rate on a year-on-year basis stood at 24.48 percent in January 2025. This means that the general prices of goods and services in Nigeria increased by 24.48 percent compared to January 2024. All these are in the midst of static household income.

For us, addressing this crisis requires urgent and concerted efforts, as the government must implement policies to regulate rents, stabilise food prices, and introduce subsidies where necessary. Public-private partnerships can help increase housing supply, as a one-bedroom apartment now costs between N1 million and N1.2 million in Mainland Lagos, and improve agricultural productivity.

In basic economics, it is known that inflation erodes the value of money; as it rises, money loses its purchasing power.

In other climes, to address the challenge of industrial dispute that usually comes when workers feel they are worse off, governments arrange their compensation scheme in a way that a rise in inflation above a benchmark is usually matched by a corresponding rise in income. But in Nigeria, the reverse is always the case.

What we are seeing today is that inflation has eroded every class of income earnings—as everything—not excluding any sector—has been affected. This dismal situation renders pensioners more hopeless, and much the same can be said for those who are still in service.

In spite of global economic inflation, the minimum wage in Nigeria remains at N70,000/month, and some states have not started paying till now. Nigerians, we were told, “survive because they adapt.” Adapt to poverty or inflation? Not sure! MA Johnson, a columnist in BusinessDay, once wrote.

We are of the view that as politicians look towards the next election, the nation’s economic situation should be paramount in their agenda. At the state level, we are looking forward to governors who are accessible to the people. Such accessibility must have a functional purpose. Precisely, the purpose should be to ensure that workers and pensioners are not at the receiving end of inflation. Rather, their incomes must always be ahead of this plague called inflation.