As government officials continue to celebrate ‘reduction in the prices of food items as well as improvement in economic data, some analysts say in reality, the opposite is the case as the living conditions of Nigerians have rather not improved.
While querying the fundamentals for the perceived improvement in the quality of lives, ocassioned by reduction in prices of food stuff, they noted that reduction in inflation figures, for instance, does not amount automatically to reduction in prices of goods, but rather, that the rate of rising may have reduced.
One of Nigeria’s foremost Economists, Bismarck Rewane says while the statistics look cheering, the people are unhappy.
Rewane, chief executive officer of Financial Derivatives Company, in a recent publication on the current inflation rate, said, ” No victory dance yet – Inflation’s still sneaking around:
It is noteworthy that core inflation, which is inflation excluding seasonalities and energy—rose by 0.5% to 23.1% from 22.6%. This implies that the fundamental problem with inflation in Nigeria remains structural. Hence, the solution is not merely about interest rate movements or policy changes, it is primarily about increasing output. Until output begins to increase, core inflation will remain persistent.”
Also, in the current edition of FDC Whispers, “Happy statistics, unhappy people”, Rewane further posited that though the economic dashboard is showing green, the mood of Nigerians on the streets is completely different.
“Nigeria’s macroeconomic dashboard is flashing green, yet the mood on the streets remains unmistakably grim. Official data suggests a remarkable turnaround: unemployment is down to 4% from a high of 33%, while inflation is now cooling sharply after hitting a three-decade high of 35% in December 2024.
In February, inflation moderated for a second consecutive month to 23.2%, following a data overhaul in January that brought it down by almost 11% to 24.5%.
Yet, the lived reality of most Nigerians tells a different story. Anecdotal evidence suggests that while inflation is slowing, the pace of moderation may not be as swift as official data implies. And let’s be clear: decelerating inflation does not mean prices are falling—it simply means they are rising at a slower rate. Purchasing power remains at rock bottom, and corporate sales have yet to stage a meaningful recovery.”
Admitting that spending is rebounding in 2025, and quoting “Milton Friedman” ‘Inflation is taxation without legislation,’ the chief executive said that 2024 could be regarded as an era of unlegislated taxes, with subsidy removals, currency devaluations, and excessive fiscal deficits pushing household budgets to the brink.
According to the Economist Intelligence Unit (EIU), annual household income plummeted 17% in 2024 to $5,280, down from $6,380 in 2023. The impact on consumer spending was severe: consumption expenditure nearly halved, falling from $237 billion to $122 billion, while retail sales slumped 43.6%, leaving many corporates struggling to return to pre-pandemic levels.
However, he sees hope this year with consumer spending showing early signs of recovery in the first quarter of 2025.
For instance, in February 2025, he said consumers’ confidence index showed a decrease in pessimism, rising from -23.5 index points in the previous month to -19.
The EIU projects a 4% rebound in retail sales in 2025, with consumer spending expected to recover modestly to $127 billion.
He was, however, quick to add that productivity can only happen where there is electricity.
“Nigeria’s productivity crisis is, at its core, an energy crisis. A nation of about 230 million people operates on a power grid that barely musters 5,000MW, a fraction of its estimated 30,000MW requirement. Nigeria’s electricity consumption per capita is 182kWh compared to 3,670kWh in South Africa, 3,430kWh in Brazil and 1,910kWh in Egypt.
Yet, Nigeria’s power crisis is a paradox of scarcity in the midst of plenty. The country boasts of vast untapped renewable energy potential, with experts estimating that solar, wind, and hydro resources could generate over 60,000MW,” Rewane said.
Friday Ameh, Lagos based energy analyst sees recent rebasing of the Gross Domestic Product as producing figures that are not in agreement with realities on ground.
“In an environment where kidnappings are on the increase, Hearders are on the prowl, either levying farmers or preventing them from accessing their farms, how does one celebrate reduction in prices of food items and how sustainable could that be?.”
ALSO READ:Nigeria’s Inflation Rate Drops To 24.48 per cent In January After Rebasing
Speaking further, Ameh added, “this year alone, we have had over three grid collapses. Call it any name, whether partial or minor, the issue is that the rate and hours of darkness has increased in recent times.”
Another analyst, who pleaded for anonymity decried the manner in which appointed and elected government officials tend to deceive the public by flatly praising government when in actual sense, most Nigerians are crying of hunger and deprivation.
“I think, what they sre doing is to please their principal by heaping praises even when there know that, in most cases, opposites have been the reality. Besides, most Nigerians are not happy with the widening gulf between the upper and lower classes, with gradual and now total elimination of the middle class. So, I can confidently say that hunger has been weaponised.”
