Nigeria, Africa’s most populous nation, is grappling with a persistent inflation crisis that is disproportionately affecting its poorest citizens. Despite a slight decrease in inflation rates, the impact on everyday life remains severe, particularly for those struggling with the highest living costs.
Recent figures from the National Bureau of Statistics (NBS) show that inflation fell to 33.40 percent in July 2024 from 34.19 percent in June. While this minor drop might offer a glimmer of hope, the reality is that inflation continues to drive up the prices of essential goods like food and fuel. For many Nigerians, this means that the struggle against rising costs is far from over.
Inflation is not just a troubling statistic; it is a harsh reality for millions of Nigerians. Wealthier individuals may have the means to shield themselves from the worst effects, but for those living on the edge, inflation exacerbates vulnerabilities and drives more families deeper into poverty. According to NBS, about 38.9 percent of Nigerians lived below the poverty line in 2023, with 87 million people surviving on less than $2 a day.
“While this minor drop might offer a glimmer of hope, the reality is that inflation continues to drive up the prices of essential goods like food and fuel. For many Nigerians, this means that the struggle against rising costs is far from over.”
For low-income families, even small increases in the cost of basic necessities can be devastating. While food inflation has slightly decreased from 40.87 percent to 39.53 percent, this reduction has yet to translate into lower prices at the market. Families are forced to make tough choices, sacrificing essentials like education and healthcare to cope with rising costs.
The World Bank’s data highlights that food accounts for over 60 percent of the budgets for Nigeria’s low-income families. Thus, any rise in food prices has a profound impact on their standard of living. In contrast, wealthier Nigerians spend a smaller portion of their income on food and can better manage or even benefit from inflation through strategic investments.
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The removal of fuel subsidies in 2023 has further strained low-income households. Fuel prices have surged, leading to higher transportation costs, which have, in turn, driven up the prices of goods and services. While the affluent may absorb these costs or benefit from them, the poor face a heavy financial burden.
The social impact of Nigeria’s inflation crisis is becoming increasingly apparent. Rising living costs have fuelled widespread frustration, as evidenced by recent protests from August 1 to 10 under the hashtag #EndBadGovernance. These demonstrations reflect a growing sense of injustice and inequality, as many struggle to afford basic necessities while a small elite continues to prosper.
The education sector is also under severe strain. With inflation and rising costs forcing many parents to withdraw their children from school, the cycle of poverty is deepening. UNICEF reports that Nigeria has the highest number of out-of-school children globally. This issue has worsened with inflation, which reached 21.47 percent in November 2022. As of May 2023, UNESCO estimated around 20 million out-of-school children, although the Nigerian government disputes these figures.
UNICEF is working to address this crisis through initiatives aimed at improving literacy and numeracy across 21 states and boosting educational funding in 12 states. These efforts are vital as Nigeria tackles the twin challenges of poverty and educational inequality.
To tackle these issues, Nigerian policymakers must reassess their strategies. The Central Bank of Nigeria (CBN) needs to consider the social implications of its policies to avoid exacerbating the plight of the vulnerable. Measures that support and protect low-income families are essential to mitigate the negative effects of economic policies.
Additionally, improving the allocation of government resources is crucial. Reliable data are necessary to target assistance effectively, and increased transparency and accountability in spending will help ensure that resources reach those who need them most.
Nigeria’s inflation crisis is more than an economic challenge; it’s a social issue that threatens to widen the gap between the rich and the poor. As inflation persists, the most vulnerable are pushed further into poverty, while the wealthy remain insulated. Comprehensive and equitable policies are needed to stabilise the economy and ensure that all Nigerians benefit from the country’s growth. Without such measures, the social divide will only deepen, with serious implications for Nigeria’s future.
