Analysis-Nigerians’ cost of living pain deepens as election looms

In Abuja, Nigeria's capital, Grace Adama, a health NGO worker, laments the increasing difficulty of her 135,000 naira ($99) monthly salary to cover rising costs. She notes that her salary only lasts for about a week, and the costs of essential items like housing, electricity, and food have skyrocketed. Nigeria, Africa's largest oil exporter, has faced economic challenges in recent years, with President Bola Tinubu implementing painful reforms to pull the country out of fiscal crisis.

These reforms include removing fuel subsidies, devaluing the naira, and cutting electricity subsidies. While the government and investors claim these reforms will benefit Nigeria in the long run, many Nigerians are experiencing a significant decline in living standards. The cost of staple dishes like jollof rice has more than doubled since Tinubu took office, and petrol prices have surged six times following the removal of subsidies as the naira weakened.

According to the World Bank, nearly half of Nigeria's population fell into poverty last year, up from roughly 42% in 2022. Despite these struggles, investors remain optimistic about Nigeria's prospects, with capital inflows reaching a six-year high of $23 billion last year. However, only a small percentage of Nigerian adults invest in capital markets.

The gap between the hardships faced by ordinary citizens and the optimism of investors highlights the stark contrast in Nigeria's economic landscape. Tinubu must convince voters that the benefits of these reforms will reach them before the January elections, or face the consequences of widespread discontent.