Rising living cost, crashing quality of life of Nigerians

It is stating the obvious to say that recent economic reforms in Nigeria, particularly the removal of fuel subsidies and fully floating the local currency, have significantly negatively impacted many Nigerians. Inflation and poverty rates have been driven sky-high, leaving millions of the citizens struggling to afford basic necessities of life.

A tracking of the rate at which prices of goods and services are increasing — inflation — in the past 21 months of the Bola Ahmed Tinubu administration shows a jump by over 12 percent. This is from 22.40 percent in May 2023 to 34.80 percent at end-December 2024. A breakdown of these figures shows that the rise in food prices (measured as Food Price Index) was a key driver of the hyperinflationary trend.

At all times in the past 21 months, food inflation had out-paced the headline inflation, with the former standing at over 40 percent. Thus, while the headline inflation closed 2024 at 34.80 percent, the food inflation rate was 39.84 percent, according to the National Bureau of Statistics (NBS).

The rising cost of living in Nigeria is also attributable to high fuel prices (a direct outcome of the fuel subsidy removal), transportation fares, and vehicle maintenance costs — which have all practically gone through the roof in the past 21 months. From a modest N185 per litre in May 2023, the price of fuel (Premium Motor Spirit, PMS) has crossed N1000 per litre. Despite some local refining, PMS importation has not abated; it remains one of the imports that gulp a substantial portion of the nation’s scarce foreign exchange (FX).

In point of fact, an estimated one-third of FX demand in the foreign exchange market, all this while, is attributable to the importation of PMS and other refined products. As the impacts of these importations reflect in their landing costs, they are transferred to the ultimate consumer via high pump prices.

Subsidy removal on utilities such as electricity, water, gas, among others, has also pushed up the cost of living for Nigerians. In some instances, subsidy withdrawal on these items had been accompanied by hiked tariffs. Thus, electricity tariff has been increased by more than two hundred percent, in many locations across the country in recent times.

Recently, too, the Nigeria Customs Service (NCS) imposed a four percent charge on Free-on-Board (FOB) value of all imports. This import levy is contained in Section 18(1)(a) of the Nigerian Customs Service Act (NCSA) 2023. However, the charge was vehemently opposed by the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA) and a number of other private sector stakeholders.

This NCS’ charge (though said to have been suspended) translates to hike in the cost of importation; and transfer of the same to the Nigerian consumer. Implicit in the levy is rising inflation, as reflected in high prices of goods and services.

About the same time, the Nigerian Ports Authority (NPA) also increased its tariff from seven percent to 15 percent, citing the need for competitiveness and infrastructural upgrades. Again, however, key stakeholders such as MAN and others insist that the tariff hike could have negative economic repercussions in the form of increased production costs, reduced competitiveness, and massive cargo diversion to neighbouring countries.

In a move that also substantially adds to the financial burdens of Nigerians, telecom companies in the country have raised their tariff by 50 percent. This move approved by the Nigerian Communication Commission (NCC), affects both the data and voice services of the telcos. The NCC has however justified the tariff hike as necessary “to safeguard the sustainability of the industry, balancing consumer protection and the financial realities faced by telecom operators.”

However, federal lawmakers, consumer and labour groups have kicked against the telecom tariff hike, arguing that the initiative would exacerbate the economic challenges already faced by Nigerians. In fact, the Nigeria Labour Congress (NLC) and its affiliates threatened a nationwide boycott of mobile telecom services to protest the price hike.

From the financial services sector has also come an increase of charges on cash withdrawals from bank Automated Teller Machines (ATMs). According to a CBN circular issued on February 10, 2025, “withdrawal from another bank’s on-site ATM attracts a charge of N100 per N20,000.” For off-site ATMs, such withdrawal attracts a charge of N100 plus a surcharge of not more than N500.

The CBN says “the surcharge, which is an income of the ATM deployer/acquirer, shall be disclosed at the point of withdrawal to the consumer.” All these charges or surcharges are however brand new tariffs on bank customers who, hitherto, were utilizing the services of the ATMs free of charge. They are really driving up the cost of living for the citizenry.

As these tariffs kick in, the federal government is also mooting the idea of restoring the tollgates on major roads since phased out by previous administrations. Specifically, the Tinubu administration plans to toll all trunk roads in the country, upon completion of construction and renovation. The minister of works, David Umahi says the tolling of the federal roads “is going to bring a lot of money to the federal government.”

Whatever the toll fees turnout to be, they all add to the huge burden of rising cost of living in Nigeria — a situation that has kept unleashing poverty, hunger, and penury on the citizenry. Thus, from the largest economy in Africa in 2014 with a gross domestic product (GDP) of $574.18 billion, the Nigerian economy has shrunk to a GDP of $199.72 billion in 2024.

By the same pattern, Nigeria’s GDP per capita stood at $3,201 in 2014, but has kept crashing, to stand at $1,621 in 2023; and now about $895 in 2025. This trend certainly translates to declining standard of living and quality of life. As income per capita decreases, people’s purchasing power and ability to afford basic necessities like food, healthcare, and education are compromised.

All this validates that, with some exceptions, the quality of life for the citizenry has been consistently declining in the past one decade in Nigeria. This is reflected in the nation’s Misery Index which has been worsening in recent years: reduced purchasing power of citizens, rising poverty, hunger, anger, destitution. Name it!

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