Nigeria’s economy is growing on paper, but many citizens still feel the pinch of rising costs. In other words, the economy is doing better, but people are not seeing the benefits in their daily lives.

The International Monetary Fund (IMF) says Nigeria’s GDP is expected to grow by about 4.4 percent in 2026, up from 4.2 percent in 2025. The IMF says this is because the government has been making reforms and the economy is more stable.

The World Bank also expects Nigeria to grow at about 4.4 percent in 2026 and 2027, which would be the fastest growth in more than ten years. This growth is expected to come mainly from services and non-oil businesses.

But these numbers do not tell the whole story. Even though the economy is growing, many Nigerians are still struggling. This is because the growth is not reaching everyone.

Why growth is not reducing hardship

One major reason is population growth. Nigeria’s population is growing by about 2.5 to 3 percent each year. So even if the economy grows by four percent, the growth per person is small. This means people’s living standards do not improve quickly.

Another problem is inflation, especially for food and basic items. Prices are still high, and many families cannot afford daily necessities.

Also Read: Nigeria’s urban population projected to hit 264 million by 2050

Nigeria’s National Bureau of Statistics is changing how inflation is measured because recent inflation numbers were affected by statistical changes, not actual price drops.

The World Bank says food inflation is a big problem for poor families. Many of these families spend up to 70 percent of their income on food. From 2019 to 2024, the cost of a basic food basket has gone up a lot, which hurts low-income families the most.

Poverty deepens even as growth continues

The World Bank estimates that more than half of Nigerians live below the national poverty line. A 2024 World Bank report put this at about 56 percent of the population, or about 129 million people.

This shows that growth is not helping people because prices are rising fast, jobs are not growing fast enough and wages are not increasing. The World Bank and Nigerian data also show that poverty is higher in rural areas and in the north than in the south.

Jobs, business and labour market realities

Even though the economy is growing, job creation is not keeping up. The services sector (telecoms, finance, etc.) is growing, but it does not create many jobs compared to the number of people looking for work.

Many Nigerians work in the informal economy, where pay is unstable and there is no job security. This makes it difficult for families to improve their lives.

For businesses, this gap matters a lot. When many people are poor, they spend less money. This reduces demand for goods and services.

Even businesses that are doing well may face problems because customers are only buying essentials.

Small and medium-sized businesses (SMEs) also face challenges such as:

• limited access to loans
• high interest rates
• weak customer purchasing power

  These issues make it hard for businesses to grow and hire more workers.

What analysts say about growth needed to reduce poverty

Many analysts say Nigeria needs 6 to 7 percent growth every year to reduce poverty significantly. Growth below this level may stabilise the economy, but it will not improve the lives of most people.

For now, the economy is more stable than before. The government believes that continued reforms will attract more investment and strengthen the economy. Even with these improvements, the cost of living and food insecurity remain serious problems. The United Nations has warned that insecurity and economic pressures are causing humanitarian crises in some regions, especially in the northeast, where food scarcity is severe.

Meiza Nigeria