Grace Adama puts on her earrings in her two-room flat in Abuja before grabbing her handbag and heading to work.
The health NGO worker earns 135,000 naira ($99) a month, nearly twice Nigeria’s minimum wage. Yet she says her income now disappears within days as the cost of housing, electricity and food continues to rise.
“If I’m paid today, my salary stays with me just for one week,” she told Reuters. “If you see the cost of living, house, electricity, everything has gone up.”
Adama’s experience reflects a wider cost-of-living crisis confronting millions of Nigerians as the country approaches elections. Living standards have deteriorated sharply since President Bola Tinubu introduced a series of sweeping economic reforms, including the removal of fuel subsidies, the devaluation of the naira and reductions in electricity subsidies.
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The government and investors argue that the reforms were necessary to prevent a deeper fiscal crisis and put Africa’s largest oil producer on a more sustainable economic path.
But for many ordinary Nigerians, the promised benefits have yet to materialise.
The cost of preparing the country’s staple jollof rice has more than doubled since Tinubu took office, according to Lagos-based SBM Intelligence. Petrol prices, meanwhile, have risen roughly sixfold following the removal of subsidies, the weakening of the naira and higher global oil prices.
With elections approaching in January, Tinubu faces the difficult task of convincing voters that the economic pain they have endured will eventually translate into better living standards.
NIGERIANS FEEL THE PAIN AS INVESTORS CHEER
The contrast between economic indicators and everyday life has become increasingly striking.
The World Bank estimates that just over half of Nigeria’s population lived in poverty last year, compared with roughly 42% in 2022.
Some Nigerians have responded to the rising costs by cutting household spending, moving to cheaper accommodation and relying on loans to cover basic expenses.
Adama said she had stopped buying meat regularly, moved to a smaller apartment and was still forced to take short-term loans to pay her bills. She also said she could no longer send money to her elderly mother in Benue state as she had done previously.
“I can’t even send money to my aged mother at home,” she said. “I can’t do a lot of things that I used to do before.”
Yet investors have taken a markedly more positive view of Nigeria’s economic direction.
“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.”
That divergence creates a major political challenge for Tinubu. Financial markets can respond positively to reforms long before their benefits reach households, while voters tend to judge governments according to the immediate cost of food, transport, housing and electricity.
Tinubu has been nicknamed “T-Pain” by some Nigerians frustrated by the rising cost of living.
REFORMS AIM TO END YEARS OF ECONOMIC DISTORTIONS
Tinubu inherited an economy burdened by years of policies that had created significant distortions.
Under former President Muhammadu Buhari, the government maintained petrol subsidies, imposed import restrictions and operated tight currency controls. While those measures were intended to protect consumers and encourage domestic production, they also contributed to shortages, foreign-exchange difficulties and growing pressure on government finances.
Fuel subsidies alone cost the government around $10 billion in 2022.
“We were living in fiscal illusions,” Finance Minister Taiwo Oyedele said at a recent event in Abuja. “We needed to stop deceiving ourselves so the country can move forward.”
Tinubu’s government therefore moved quickly after taking office to dismantle several of those policies.
The removal of fuel subsidies immediately pushed up transportation and living costs. Currency reforms also caused the naira to lose significant value, increasing the cost of imported goods.
The government argues that these measures were unavoidable and that rebuilding the economy requires accepting short-term pain.
There are signs of progress.
Nigeria’s stock market has risen close to 60% this year. Capital inflows reached a six-year high of $23 billion last year, while the opening of the 650,000-barrel-per-day Dangote refinery has created hopes that domestic refining will eventually reduce the country’s dependence on imported petroleum products.
The government has also pointed to increased investment in domestic oil assets as evidence that its reforms are attracting capital.
But those improvements have not necessarily translated into better household finances.
A BOOMING STOCK MARKET, BUT FEW CAN INVEST
Nigeria’s financial markets have benefited significantly from renewed investor confidence.
However, fewer than 5% of Nigerian adults invest in capital markets, according to the Nigerian stock exchange.
Much of the recent capital inflow has also been concentrated in short-term financial instruments such as Treasury bills, allowing foreign investors to quickly withdraw their money if economic conditions deteriorate.
For ordinary Nigerians, borrowing remains extremely expensive.
The central bank’s key interest rate stands at 26.5% as policymakers attempt to control inflation, which remains close to 16%.
That makes it difficult for businesses to expand and for households to access affordable credit.
At the same time, petrol prices average roughly 1,600 naira ($1.18) per litre nationally. Although that is lower than prices in neighbouring Ghana and Ivory Coast, it remains prohibitively expensive for many Nigerians who had become accustomed to subsidised fuel.
“The solution for me is for government to bring the fuel price down,” said Lagos food seller Eji Uchenna.
She said customers who once purchased food in bulk can no longer afford to do so.
POLITICAL PRESSURE BUILDS
The economic pressure is increasingly becoming a political issue.
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.
Economic hardship is not the only concern. Security, particularly widespread kidnapping, remains a major issue for voters.
Yet widespread dissatisfaction does not necessarily mean Tinubu is vulnerable at the ballot box.
Nigeria’s opposition remains fragmented, reducing the likelihood that dissatisfaction will automatically translate into a coordinated electoral challenge.
“The opposition is disunited, and… the only way the opposition beats Tinubu is if they are united,” said Cheta Nwanze, chief executive of SBM Intelligence.
That gives Tinubu some political space to continue pursuing his economic programme despite the public backlash.
THE TEST IS WHETHER GROWTH REACHES HOUSEHOLDS
Investors remain optimistic that the reforms will eventually produce stronger economic growth, lower inflation and greater investment.
Louw said that if the government maintains its policies, workers could begin to benefit as inflation falls and interest rates decline.
But the transition remains painful, and the government faces growing pressure to ensure that economic gains are not concentrated among investors and businesses while ordinary households continue to struggle.
The central challenge is therefore no longer simply whether Nigeria’s reforms are economically necessary. It is whether the government can make those reforms politically and socially sustainable.
Tinubu must demonstrate that the sacrifices demanded from Nigerians are producing tangible improvements in their daily lives before voters head to the polls.
Finance Minister Oyedele acknowledged that the government must do more to ensure that economic recovery translates into broader prosperity.
“When inequality persists, it becomes dangerous,” he said. “It’s like sitting on gunpowder; it explodes.”
For Nigeria, the coming election will therefore offer a test not only of Tinubu’s political standing but of whether a painful programme of economic reform can deliver benefits quickly enough for ordinary citizens to believe in it.
With information from Reuters.
