Nigeria’s cost of living crisis is deepening as millions of households struggle with soaring food, housing, transport and electricity costs ahead of the 2027 general election.
For Grace Adama, a health NGO worker in Abuja, her monthly salary of 135,000 naira is no longer enough to cover her basic needs.
“If I’m paid today, my salary stays with me just for one week,” Adama told Reuters. “If you see the cost of living, house, electricity, everything has gone up.”
Her experience reflects the growing pressure on households following President Bola Tinubu’s economic reforms, including the removal of petrol subsidies, naira devaluation and cuts to electricity subsidies.
Jollof rice costs more than twice as much
The impact of rising prices can be seen in one of Nigeria’s most popular dishes.
According to Lagos-based SBM Intelligence, the cost of preparing jollof rice is now more than double what it was when Tinubu took office in May 2023.
Petrol prices have also risen sharply, reaching about six times their pre-subsidy-removal level as the naira weakened and global oil prices increased.
The World Bank estimates that just over half of Nigeria’s population lived in poverty last year, compared with about 42% in 2022.
Investors welcome reforms as households struggle
The economic pain contrasts with growing optimism among investors.
Nigeria’s capital inflows reached a six-year high of $23 billion last year, according to the National Bureau of Statistics. The Nigerian stock market has also risen by close to 60% this year.
“This is the most positive investors have been about Nigeria probably in the last two decades,” said Thys Louw, a portfolio manager at Ninety One. “They’re taking the tough medicine now.”
The government says the reforms are beginning to deliver results, pointing to stronger financial markets, the transfer of oil assets to local companies and the opening of the 650,000-barrel-per-day Dangote refinery in 2024.
However, fewer than 5% of Nigerian adults invest in capital markets, according to the Nigerian bourse, while much of the foreign capital is concentrated in short-term financial assets.
High interest rates add to the pressure
Businesses and individuals continue to struggle to access affordable credit as the Central Bank of Nigeria’s key interest rate stands at 26.5%.
Inflation remains close to 16%, while petrol prices average about 1,600 naira per litre nationally.
For Lagos food seller Eji Uchenna, the cost of fuel is hurting both businesses and consumers.
“The solution for me is for government to bring the fuel price down,” Uchenna said. His customers can no longer afford to buy in bulk.
Adama said she has stopped buying meat regularly, moved into a smaller apartment and still relies on short-term loans to pay some bills.
“I can’t even send money to my aged mother at home…(in Benue state, several hours away). I can’t do a lot of things that I used to do before,” she said.
Cost of living becomes election issue
The economic strain is becoming an increasingly important political issue as Nigeria approaches the 2027 election.
In June, federal workers rejected a proposed 100,000-naira minimum wage and threatened an indefinite nationwide strike.
A June voter sentiment tracker by SBM Intelligence found that 80% of Nigerians believed the country was moving in the wrong direction, with security and kidnapping among the major concerns.
Still, SBM Intelligence Chief Executive Cheta Nwanze said public anger alone may not be enough to defeat Tinubu because of divisions within the opposition.
“The opposition is disunited, and…the only way the opposition beats Tinubu is if they are united,” Nwanze said.
Finance Minister Taiwo Oyedele acknowledged that the government needs to do more to ensure Nigerians benefit from the economic recovery.
“When inequality persists, it becomes dangerous. It’s like sitting on gunpowder; it explodes,” Oyedele said.
The government argues that sticking with the reforms could eventually bring down inflation and interest rates, allowing workers and households to benefit from stronger economic growth.
