In Abuja, the capital of Nigeria, Grace Adama puts on her earrings in her two-room apartment before taking her purse and heading out for work.
Although the health NGO employee’s monthly income of 135,000 naira ($99) is almost twice the nation’s minimum wage, she claimed that living is becoming more difficult because her pay is not keeping up with the skyrocketing prices.
She stated, “If I’m paid today, my salary stays with me just for one week.” “If you see the cost of living, houses, electricity—everything has gone up.”
In the last three years, millions of people in Africa’s biggest oil exporter have seen their standard of living collapse as President Bola Tinubu’s administration has implemented difficult reforms, such as the elimination of fuel subsidies, the devaluation of the naira, and the reduction of energy subsidies.
The reforms, according to the government and investors, were crucial to rescuing the nation from the brink of a fiscal crisis and would eventually be profitable.
However, according to an index by Lagos-based SBM Intelligence that monitors the costs of the materials used to prepare the dish, Nigerians now pay more than twice as much to make the basic jollof rice as they did when Tinubu took office. After the subsidy was eliminated, the price of gasoline increased sixfold, the naira depreciated, and the price of oil increased worldwide.
NIGERIANS BRISTLE, INVESTORS HAIL REFORMS
The World Bank estimates that just over half of Nigeria’s population lived in poverty last year, up from about 42% in 2022.
Investor optimism contrasts sharply with citizens’ struggles under Tinubu, who some have dubbed “T-Pain” due to rising costs.
“This is the most positive investors have been about Nigeria probably in the last two decades,” said Thys Louw, portfolio manager at investment firm Ninety One. “They’re taking the tough medicine now.”
A nation already characterized by contrasts—glittering, cosmopolitan Lagos and militant-threatened Maiduguri in the northeast; marble-laden mega mansions and tin-roofed shacks housing entire families—is given a new perspective by the gap between those like Adama, squeezed by costs and booming financial markets.
Before the elections in January, Tinubu needs to persuade voters that the reforms will benefit them as well.
“My elderly mother lives in Benue State, several hours away, and I am unable to send her money at home. Adama remarked. “I can’t do a lot of things that I used to do before.”
She also mentioned that she had relocated to a smaller apartment and stopped eating meat, but she was still dependent on short-term loans to cover her expenses.
BOOMING STOCK MARKET, FEWER LOANS
Tinubu’s term came after President Muhammadu Buhari’s eight years of unconventional economic policies, which included import bans to support local industry, strict currency controls, and fuel subsidies that drained $10 billion from government coffers in 2022 alone.
“We were living in fiscal illusions,” Nigeria’s Finance Minister Taiwo Oyedele stated at a recent event in Abuja. “We needed to stop deceiving ourselves so the country can move forward.”
The Nigerian stock exchange, which has increased by over 60% this year, the transfer of oil assets to local businesses, and the inauguration of the 650,000-barrel-per-day Dangote oil refinery outside of Lagos in 2024 are just a few examples of how Tinubu’s government claims reforms are paying off.
According to the National Bureau of Statistics, capital inflows into Nigeria reached a six-year high of $23 billion last year, indicating investor confidence.
However, according to the Nigerian bourse, less than 5% of adult Nigerians invest in capital markets, and the inflows are mostly concentrated in “hot money”—short-term Treasury bills and other financial assets that investors may swiftly sell if problems arise.
With the main central bank interest rate at 26.5% as the bank fights near-16% inflation, businesses and individuals find it difficult to obtain loans that are affordable.
The average price of petrol in the country is about 1,600 naira ($1.18) per liter, which is less than in Ghana and the Ivory Coast, but it is still too much for many people who have been receiving cheap fuel as their primary government benefit for years.
“I think the government should lower the price of fuel,” Lagos food vendor Eji Uchenna stated. His clients are no longer able to purchase in large quantities.
Gunpowder in the offing
Federal employees threatened an indefinite nationwide strike in June after rejecting a proposed minimum pay of 100,000 naira. According to SBM Intelligence’s June voter sentiment tracker, 80% of Nigerians believe the country is headed in the wrong direction.
Security concerns are paramount, as kidnapping is common.
However, given a dispersed opposition, SBM Chief Executive Cheta Nwanze stated that Tinubu would not necessarily be overthrown by the rage.
“The opposition is divided, and the only way they can defeat Tinubu is if they band together,” Nwanze stated.
According to Louw, if the government continues to implement its plans, workers should begin to profit as inflation declines and interest rates are lowered.
Oyedele agreed that to guarantee “prosperity for all Nigerians,” the government had to take greater action. When inequality continues, it becomes hazardous. It erupts like when you sit on gunpowder.
