Nigeria’s economy is showing impressive signs of recovery, but the gains are being overshadowed by the rising cost of food that continues to push millions of citizens deeper into hardship. According to a recent World Bank report, the nation’s GDP expanded by 3.9 percent in the first half of 2025, marking one of the strongest performances in recent years. Despite this, the same report warns that inflation — particularly food inflation — remains the greatest threat to Nigerians’ welfare.
The growth, according to analysts, is largely attributed to ongoing economic reforms initiated by President Bola Ahmed Tinubu’s administration, which include the removal of the fuel subsidy, foreign exchange unification, and renewed investor confidence. These policy shifts have helped stabilize Nigeria’s fiscal position, reduced the rate of debt accumulation, and attracted a new wave of investment into the non-oil sectors.
Economic Growth and Reform Successes
The report highlights that Nigeria’s economy grew by 4.23 percent in the second quarter of 2025 alone — the fastest growth recorded in over a year. The expansion was driven mainly by the non-oil sector, which now accounts for nearly 96 percent of the country’s GDP. Services, agriculture, and industry all performed better than expected, signaling a gradual diversification away from the overreliance on crude oil exports.
Public debt has also begun to decline for the first time in a decade, falling to 39.8 percent of GDP. Foreign reserves have risen to over $42 billion, offering the Central Bank of Nigeria a stronger buffer against external shocks. The government now projects the economy to grow by 4.2 percent in 2025 and 4.4 percent in 2027, supported by ongoing fiscal consolidation and international support, including a $500 million loan from the African Development Bank.
However, the impressive macroeconomic indicators tell only part of the story. Beneath the surface, millions of ordinary Nigerians continue to struggle with record-high living costs, especially when it comes to feeding their families.
The Unrelenting Burden of Food Inflation
While Nigeria’s GDP is growing, the same cannot be said for the affordability of basic necessities. Food inflation remains alarmingly high, eroding the benefits of economic growth for average citizens. According to the World Bank, food prices have increased by more than 200 percent since 2019, making essential staples such as rice, beans, and yam unaffordable for many households.
The report notes that the cost of a basic food basket has risen fivefold in six years, and poor households — who spend up to 70 percent of their income on food — are bearing the brunt. The Bank warns that if current inflation trends persist, as many as 141 million Nigerians could slip into poverty by 2026.
Experts point to several underlying factors behind the persistent rise in food prices: insecurity in major agricultural zones, weak transport infrastructure, high import tariffs, foreign exchange shortages, and inconsistent power supply that drives up production costs. Farmers in the northern and middle-belt regions continue to face attacks from armed groups, forcing many to abandon their farmlands.
World Bank’s Recommendations
In its recommendations, the World Bank urged Nigeria to dismantle import bans and lower tariffs on essential food items such as rice, sugar, wheat, and meat. The Bank argues that restrictive import policies create artificial scarcity and enable profiteering by middlemen. It also called for a more targeted social intervention program that directly supports poor households instead of broad subsidies that often benefit the wealthy.
In addition, the World Bank encouraged further investments in agricultural infrastructure — particularly rural roads, irrigation systems, and food storage facilities — to reduce post-harvest losses. It also advised that Nigeria strengthen its food supply chains and support smallholder farmers with access to financing, improved seedlings, and affordable fertilizers.
The Human Face of Inflation
For many Nigerians, these economic discussions translate into daily struggles at the market. A bag of rice now costs more than ₦70,000 in some urban areas, while a measure of garri sells for nearly triple its price from two years ago. Transport fares, electricity bills, and housing costs have all climbed alongside food prices, squeezing the already thin pockets of workers and small business owners.
Despite rising wages in a few sectors, income growth has not kept pace with inflation. The minimum wage, still under review, lags far behind the cost of living. Civil servants and traders alike continue to lament that even with the reforms, “there’s food in the market but no money to buy it.”
Balancing Growth with Inclusion
While the Tinubu administration has celebrated the economic rebound as proof of reform success, economists warn that without tackling inflation and unemployment, the growth will remain “exclusive” — benefiting a small segment of the population while leaving millions behind.
The federal government, through the Ministry of Finance and the Central Bank, has pledged to implement policies that will stabilize food prices and strengthen the naira. Initiatives such as the Presidential Food Security Council, fertilizer distribution programs, and renewed partnerships with the private sector are underway. But Nigerians are watching closely to see whether these efforts will translate into lower prices and improved living standards.
Conclusion
Nigeria’s economy may be on a path to stability, but for most citizens, the success remains distant. The growth figures present a positive outlook, yet the skyrocketing cost of food continues to dampen public optimism. Until inflation is contained and ordinary Nigerians begin to feel the impact of reform in their daily lives, economic progress will remain largely statistical — impressive on paper but painful in reality.
In essence, the World Bank’s report serves as both a commendation and a caution: Nigeria is moving in the right direction economically, but the journey toward inclusive prosperity is far from over.
Written by: Luchiinter News Desk
Source Credits: Reuters, BusinessDay, World Bank, Africa Business Insider, Ecofin Agency, and Vanguard.
Comments