The rising cost of living presents a formidable challenge for the people of Nigeria. However, this challenge is not unique to Nigeria. Globally, many countries are grappling with inflationary pressures due to a combination of geopolitics and the fiscal fallout from the COVID-19 pandemic. The conflict between Russia and Ukraine has disrupted food and energy supplies, while tensions in the Middle East exacerbate global oil price volatility. Countries such as the United Kingdom have experienced sharp inflationary spikes, Sri Lanka faced severe food shortages, and Argentina continues to endure hyperinflation. As Nigeria embarks on economic reforms—including the reduction of subsidy payments and the flotation of the naira—these challenges must be mitigated through innovative strategies across the short, medium, and long term.
This strategic roadmap offers actionable solutions for Nigeria, focusing on alleviating immediate pressures while building sustainable growth frameworks for the future. Every intervention must not only be informed by global lessons but must also be adapted to Nigeria’s context. The moment is ripe for impactful, transformative change, enabling Nigeria to emerge stronger, charting a path toward an inclusive, sustainable future for its citizens. Alongside these strategies, funding mechanisms will ensure these interventions are practical and impactful.
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Empowering leadership through strategic capacity development
A pivotal element in addressing the cost-of-living crisis is enhancing the strategic capacity of Nigeria’s leaders. Investing in leadership development programmes empowers policymakers to adopt holistic and strategic solutions. For instance, countries like Singapore have implemented rigorous leadership training, resulting in visionary policies that drive economic success. In Nigeria, seeking uncommon strategic insights focused on leadership excellence can equip leaders with the skills to navigate complex economic landscapes, fostering innovative approaches to inflation, unemployment, and poverty.
Cultivating the right mindset for sustainable economic growth
Equally important is fostering a progressive mindset among leaders that prioritises sustainable economic growth. This involves embracing transparency, accountability, and a commitment to long-term development over short-term gains. Rwanda’s remarkable transformation, driven by leadership that values sustainability and inclusiveness, serves as a compelling example. Nigerian leaders can adopt similar principles, promoting policies that encourage investment, diversify the economy, and enhance the quality of life for all citizens.
“In Nigeria, seeking uncommon strategic insights focused on leadership excellence can equip leaders with the skills to navigate complex economic landscapes, fostering innovative approaches to inflation, unemployment, and poverty.”
Short-term strategies: Immediate relief for citizens
In the short term, providing quick relief to vulnerable citizens is essential to cushion the impact of higher living costs. One of the most effective ways to achieve this is through direct cash transfers. India demonstrated the efficacy of this approach during the COVID-19 pandemic by disbursing payments to over 200 million women under the Pradhan Mantri Jan Dhan Yojana scheme. A similar initiative in Nigeria, targeted at the poorest households, would offer immediate relief and help prevent households from slipping into deeper poverty.
Additionally, temporary tax reductions on essential goods can lower retail prices and ease the burden on consumers. For instance, Kenya temporarily reduced VAT from 16 percent to 14 percent during the pandemic to help citizens cope with rising costs. Nigeria could adopt a similar approach by reducing import duties on staple foods and essential products. (There is already an ineffective zero duty on food. The government should check its own policies for effectiveness and self-correct.
Another immediate intervention is providing subsidies for public transportation. With transport costs constituting a significant portion of household expenses, subsidies can ease commuting costs. Germany exemplified this with its €9 monthly public transport ticket, a move that was widely appreciated for making travel more affordable. Proper implementation and funding of the conversion and adoption of compressed natural gas (CNG) for public transport could also be explored with vigour. The government should make the kits for conversion cheaper by working directly with manufacturers or, better still, encouraging them to start producing locally.
To prevent market distortions, the government—especially at the state level—must monitor prices and curtail hoarding. India’s proactive market surveillance, particularly on essential commodities like onions and pulses, has shown that monitoring systems can stabilise prices and prevent panic buying. Nigeria should implement similar anti-hoarding policies, supported by sanctions for violators.
The government can also release more strategic reserves of food and fuel to counteract supply disruptions and stabilise prices. The United States’ decision to release oil from its Strategic Petroleum Reserve in 2022 eased global fuel prices, a model Nigeria could replicate with its grain and petroleum reserves.
Furthermore, introducing price caps on essential medicines and healthcare services will ensure affordability in the short term. South Africa’s Single Exit Price policy for medicines provides an example of how government intervention can keep healthcare accessible for citizens.
Finally, community feeding programmes can offer immediate relief to vulnerable populations. Brazil’s Zero Hunger Programme successfully used community kitchens to provide meals to those in need. Nigeria could expand its school feeding programmes and establish community kitchens to support the most affected populations. This should be negotiated into corporate social responsibility mandates for corporations. The government should minimise direct involvement in such activities to reduce the risk of corruption.
Medium-term strategies: Building resilience through strategic investments
Medium-term strategies are crucial to fostering economic resilience and preventing future crises. One priority is to boost local production through agricultural support. Ethiopia’s Agricultural Transformation Agency exemplifies how targeted interventions—such as improved seed distribution and farming techniques—can increase food production and reduce dependency on imports. Nigeria can leverage its agricultural potential by providing farmers with access to better inputs and technical training.
Encouraging small and medium enterprises (SMEs) through financial incentives and business development support will stimulate job creation and income growth. Malaysia’s SME Masterplan successfully facilitated economic growth and employment by providing capital and training to entrepreneurs. Nigeria should prioritise similar initiatives, focusing on sectors with high growth potential.
Investment in public transportation infrastructure can alleviate commuting costs while addressing urban congestion. Colombia’s TransMilenio system in Bogotá improved mobility for millions of citizens and reduced their transport expenses. Expanding Nigeria’s public transportation network, especially in urban centres, will similarly lower commuting costs. Encouraging all subnational governments to build suitable mass transit networks—whether rail, buses, or trams—powered by CNG, renewable electricity, or diesel is essential.
Read also: Nigerians at the mercy of market forces as cost-of-living crisis worsens
Supporting renewable energy adoption is another essential medium-term strategy. Morocco’s investment in solar energy through the Noor Ouarzazate Solar Complex created jobs and lowered energy costs. Nigeria can incentivize renewable energy solutions—such as solar panels in rural areas—to reduce reliance on expensive fossil fuels. Indeed, Nigeria has massive potential for solar energy nationwide, and wind energy in the North-West and North-East is crucial. Sub-national governments should start building medium- to large-scale solar and wind farms for power generation. New legislation allows every state to generate and sell power.
Food price stabilisation funds can provide a buffer during periods of price volatility. Indonesia’s State Logistics Agency (Bulog) stabilises rice prices by managing reserves and offering subsidies. Nigeria could establish a similar fund for key staples to cushion against market fluctuations.
To address housing costs, developing affordable housing programmes is vital. Singapore’s Housing and Development Board provides affordable homes for over 80 percent of its population. Nigeria could partner with private developers to build affordable housing units and offer mortgage subsidies to middle- and low-income families.
Finally, strengthening social safety nets through expanded welfare programs, such as unemployment benefits and health insurance, will protect vulnerable citizens from economic shocks. Chile’s Solidarity and Social Investment Fund offers a model of comprehensive social support that Nigeria can emulate to enhance the well-being of its population.
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Dr Alim Abubakre is the founder of TEXEM & Senior Lecturer at Sheffield Business School and Advisory Board Member of the London Business School Africa Society.
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