Nigeria, Africa’s most populous nation, is grappling with a troubling paradox. Despite positive macroeconomic indicators, including a rise in GDP and a slight dip in inflation, millions of Nigerians continue to struggle with daily hardships.
This paradox highlights a deeper issue within the country’s economic framework—growth that fails to reach the majority of its population.
In the second quarter of 2024, Nigeria’s GDP growth rose to 3.19 percent from 2.98 percent in the previous quarter, according to the National Bureau of Statistics (NBS). This uptick, reflecting a recovery from economic slumps caused by domestic challenges like insecurity and policy inconsistencies, might seem promising. However, a closer examination of ordinary Nigerians’ lived experiences tells a different story.
At the same time, inflation figures show a marginal decrease. The NBS reports that overall inflation dropped from 34.19 percent to 33.40 percent in July 2024, and food inflation fell from 40.87 percent to 39.53 percent.
Yet, despite these improvements, the cost of living remains exorbitantly high. Many Nigerians are finding it increasingly difficult to afford basic necessities such as food, housing, and healthcare.
Economists and experts express deep concerns about the disconnect between macroeconomic indicators and the everyday experiences of Nigerians, yet they believe it is too early to draw definitive conclusions.
Umar Elfaruk, an economist at a research consortium, offers a critical perspective: “While the rising GDP and improved inflation figures might seem promising, they mask a more troubling reality. Economic growth has not been inclusive, and the benefits are not reaching the majority of Nigerians. Despite these positive indicators, many continue to struggle with daily hardships.
We remain hopeful that sustained improvements in these figures will eventually lead to broader benefits for the population. However, without targeted policies to address inequality and support those most in need, the current growth may not translate into meaningful change for the many Nigerians still facing significant economic challenges.”
Similarly, Adeola Akin, a policy analyst, underscores the complexities of the current economic situation: “While the decrease in inflation is a step in the right direction, it is insufficient to address the broader economic struggles faced by many Nigerians. The persistent high cost of living, combined with stagnation in job creation and income distribution, remains a significant hurdle.
The reduction in inflation has not translated into meaningful relief for the average Nigerian, as the benefits have yet to trickle down to those who need it most. Without substantial progress in creating quality jobs and improving income equality, the gains in inflation figures will likely fail to provide real and lasting improvements in living standards.”
A significant part of the problem lies in the lack of up-to-date unemployment data. The most recent figures available are from the third quarter of 2023, which makes it challenging to assess whether the recent GDP growth is creating jobs or if Nigeria is experiencing what economists call a “jobless recovery.”
Ibrahim Suleiman, a labour economist, provides insight into a troubling phenomenon: “A jobless recovery occurs when an economy experiences growth, yet employment does not increase proportionately. This leaves many individuals without work and unable to share in the benefits of the economic upturn. This appears to be the situation in Nigeria, where despite rising GDP figures, the job market remains stagnant.
The disconnect between economic growth and job creation exacerbates the struggles of many Nigerians, who are not seeing improvements in their employment prospects. Without a corresponding rise in job opportunities, the economic benefits of growth are failing to reach a significant portion of the population, perpetuating inequality and hardship.”
The data suggest that Nigeria may indeed be experiencing such a scenario. The disconnect between economic growth and the everyday experiences of its people is becoming increasingly evident.
For instance, while the economy has shown signs of growth, the unemployment rate has remained high, and the quality of jobs available has often been poor. According to the NBS, 92.3 percent of Nigerians work in the informal sector, which offers low-paying work with little security or benefits.
Moreover, despite the rising GDP, most Nigerians have yet to experience any meaningful improvement in their standard of living. Recent declines in inflation might seem encouraging on paper, but they have not translated into real relief for consumers.
“Consequently, any increase in food prices disproportionately affects these households, pushing more people into poverty and hunger.”
Prices for essential goods such as rice, beans, and bread remain stubbornly high, forcing many families to continue struggling to put food on the table. Although some food prices, like yam, garri, pepper, and tomatoes, have decreased slightly due to seasonal factors, these reductions have done little to ease the overall burden, as earlier reported by BusinessDay market survey.
This situation is particularly troubling when considering the high proportion of household spending devoted to food in Nigeria. According to a World Bank study, food accounts for over 60 percent of household expenditures for low-income families in the country. Consequently, any increase in food prices disproportionately affects these households, pushing more people into poverty and hunger.
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The financial strain is expected to worsen as Nigeria approaches the end of the year, a period traditionally marked by a spike in the prices of staple foods like rice, beans, and proteins such as poultry, meat, and fish due to heightened festive demand.
With prices already beyond reach for many, the looming prospect of further increases is alarming. Immediate government action is crucial to stabilise food prices and ensure that the benefits of economic growth are more equitably distributed.
The festive season exacerbates the issue,” says Ngozi Adichie, a socio-economic expert. “Increased demand for food during this period often drives prices even higher, making it more difficult for low-income families to afford essentials. The government needs to implement measures to mitigate these price spikes and protect vulnerable populations.”
The stakes are high. If the government fails to address these economic issues, the consequences could be severe, including social unrest. Historically, economic hardships have often led to protests, strikes, and civil disobedience when people cannot meet their basic needs. For instance, recent demonstrations under the banner of #EndBadGovernance reflects this growing frustration.
The widespread cry of “Ebi npawa o” (We are hungry) across Nigeria is more than a plea for food; it is a call for justice and fairness. The government’s response to this crisis will be crucial in determining whether Nigeria can avert further instability and achieve a more equitable economic recovery.
Kemi George, a trader at Ojuwoye Market in Mushin, Lagos, echoes this sentiment. “Every day is a struggle,” she says. “Even though the government talks about economic growth, I don’t see any difference in my daily life. Food is expensive, and it’s getting harder to provide for my family.”
Her experience highlights a broader discontent—one that is not merely about high prices but also about a deep-seated need for genuine economic and social equity.
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This crisis, far from being merely an economic challenge, has the potential to unravel the very fabric of our society. The hunger gnawing at the hearts of our people is a stark reminder that economic growth must be more than a mere statistic. It must be a catalyst for a better life, a tangible improvement in the daily struggles faced by our citizens. The government must rise to this occasion, not with reactive measures, but with a proactive, forward-thinking approach. The time for indecision is over. The time for action is now. We cannot afford to let this crisis fester, deepening the wounds of our nation and further jeopardising the well-being of our people.
Nigeria’s rising GDP and falling inflation figures should not be cause for celebration just yet. While these indicators suggest that the economy is on the mend, they mask a deeper problem—an economic recovery that is leaving too many Nigerians behind.
The government must prioritise inclusive growth, job creation, and social safety nets to ensure that all Nigerians can share in the benefits of economic progress. This means investing in education, healthcare, and infrastructure, as well as implementing policies that promote entrepreneurship and job creation. Additionally, the government must establish robust social safety nets to protect vulnerable populations from economic hardship. By addressing these issues, Nigeria can create a more equitable and just society where all citizens have the opportunity to thrive.
Only by embracing a comprehensive approach to economic development can Nigeria hope to achieve sustainable growth and social stability. The time to act is now, before the country’s economic paradox becomes an irreversible crisis. By taking bold and decisive action, Nigeria can seize the opportunity to build a brighter future for its people.
Oluwatobi Ojabello, senior economic analyst at BusinessDay, holds a BSc and an MSc in Economics as well as a PhD (in view) in Economics (Covenant, Ota).
Wasiu Alli is a business and finance journalist at BusinessDay who writes about the economy, business trends, and politics. He holds a BA. Ed. and M. Ed. in English Language and Education.
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