Nigeria’s Economic Growth Mirage: Stability on Paper, Hardship for Citizens
Nigeria’s economy shows signs of headline stability, but for millions of citizens, the benefits remain out of reach. According to official data, headline inflation has eased from 34.8% in December 2024 to 21.9% by July 2025, foreign reserves have hit a three-year high of $40.1 billion, and the IMF forecasts 3.4% GDP growth for the year, with the Central Bank of Nigeria (CBN) projecting 4.2%. Yet behind these numbers, ordinary Nigerians face rising costs of living, limited job opportunities, and shrinking incomes—a reality that starkly contrasts with the optimism reflected in economic reports.
The core issue lies in Nigeria’s growth. Economic gains are concentrated in oil, finance, and telecommunications—industries that generate revenue but employ relatively few people. While headline inflation may have moderated, food and transport costs continue to consume more than half of an average household’s income. Per capita income has fallen from $877 in 2024 to $835 in 2025, highlighting how aggregate growth has failed to keep pace with population expansion. The apparent rise in reserves is equally misleading: net reserves of $23 billion cover only a few months of imports, while debt servicing consumes nearly half of federal revenue, limiting funds for health, education, and infrastructure.
Small and medium-sized enterprises (SMEs), which employ over 80% of Nigeria’s workforce, are particularly vulnerable. High interest rates above 25%, currency fluctuations, and unreliable electricity have forced thousands of businesses to shut down. The Nigerian Economic Summit Group estimates that nearly 30% of MSMEs could close between 2024 and 2025. Government initiatives like the ₦4 trillion electricity refinancing plan must translate into tangible improvements in power supply rather than accounting adjustments, or the bulk of the workforce will continue to struggle.
Food insecurity remains another pressing concern. The UN’s Food and Agriculture Organisation projects that 33 million Nigerians will face high levels of hunger this year. While the CBN attributes falling inflation to tighter monetary policy, the approach has inadvertently eroded real wages, increased unemployment, and diminished purchasing power. Unlike countries such as Kenya or Indonesia, which pair fiscal discipline with SME support and export diversification, Nigeria’s growth largely benefits capital-intensive sectors, leaving households disconnected from economic progress.
Experts argue that genuine recovery requires a shift from managing macroeconomic indicators to improving citizens’ welfare. Key measures include fiscal reform for transparency and efficiency, targeted credit and energy support for productive sectors, and the establishment of a credible national social safety net. Without consistent implementation of such policies, economic stability risks remaining a “statistical mirage,” with growth figures on paper masking the daily hardships of ordinary Nigerians. For stability to be meaningful, it must be reflected in purchasing power, job creation, and household resilience—not just in glossy reports
source: Business day