By Ukumbi Afrika 
August 10, 2026
Abuja—Nigeria’s cost-of-living crisis is deepening as millions of households continue to struggle with higher food, housing, transport and electricity costs, creating a growing challenge for President Bola Tinubu ahead of the country’s January elections.
The pressure on households comes three years after Tinubu’s administration introduced sweeping economic reforms, including the removal of petrol subsidies, naira devaluation and reductions in electricity subsidies.
While the government and investors argue that the reforms were necessary to restore fiscal stability and attract investment, many Nigerians say the immediate impact has been a sharp deterioration in living standards.
For Grace Adama, a health NGO worker in Abuja earning 135, 000 naira ($99) a month, her salary barely lasts a week.
“If I'm paid today, my salary stays with me just for one week, ” she told Reuters, citing rising costs for housing, electricity and other essentials.
RICE MORE THAN DOUBLES IN COST
The rising cost of food has become one of the clearest indicators of the pressure facing Nigerian households.
An index compiled by Lagos-based SBM Intelligence shows that the cost of preparing jollof rice has more than doubled since Tinubu took office in 2023.
Petrol prices have also risen sharply following the removal of the subsidy, while the naira's weakening and higher global oil prices have added to transport and production costs.
The World Bank estimates that just over half of Nigeria’s population lived in poverty last year, compared with roughly 42% in 2022.
The economic squeeze has led some Nigerians to reduce food consumption, move to cheaper housing and rely on short-term borrowing to meet basic expenses.
INVESTORS SEE A DIFFERENT NIGERIA
The economic pain facing households contrasts with growing optimism among investors.
Nigeria’s stock market has risen by close to 60% this year, while foreign capital inflows reached a six-year high of $23 billion last year, according to the National Bureau of Statistics.
Investors have welcomed the government's efforts to address long-standing fiscal and foreign-exchange distortions.
“This is the most positive investors have been about Nigeria probably in the last two decades, ” said Thys Louw, portfolio manager at Ninety One.
The government has also highlighted the transfer of oil assets to local companies and the opening of the 650, 000-barrel-per-day Dangote refinery in 2024 as evidence that its reforms are beginning to reshape the economy.
However, the benefits of the financial-market boom remain limited for ordinary Nigerians.
Fewer than 5% of Nigerian adults invest in capital markets, according to the Nigerian bourse, while much of the foreign capital entering the country is concentrated in short-term investments such as Treasury bills.
HIGH INTEREST RATES KEEP CREDIT OUT OF REACH
Businesses and households continue to face expensive borrowing costs.
The Central Bank of Nigeria’s benchmark interest rate remains at 26.5%, while inflation is close to 16%, making affordable credit difficult to obtain.
Petrol prices average around 1, 600 naira ($1.18) per litre nationally — lower than prices in neighbouring Ghana and Ivory Coast but significantly higher than the subsidised prices Nigerians became accustomed to for years.
For food sellers such as Lagos-based Eji Uchenna, higher petrol and food costs are directly affecting customers.
“The solution for me is for government to bring the fuel price down, ” Uchenna said, adding that customers can no longer afford to buy food in bulk.
ECONOMIC PAIN BECOMES AN ELECTION ISSUE
The economic situation is increasingly becoming a political challenge for Tinubu as Nigerians prepare to vote.
In June, federal workers rejected a proposed 100, 000-naira minimum wage and threatened an indefinite nationwide strike.
A voter sentiment tracker by SBM Intelligence also found that 80% of Nigerians believe the country is moving in the wrong direction.
Security concerns, including widespread kidnapping, remain among voters’ biggest worries.
However, analysts say public dissatisfaction may not automatically translate into an electoral defeat for Tinubu because of divisions within the opposition.
SBM Intelligence Chief Executive Cheta Nwanze said the opposition would need to unite if it hopes to defeat the president.
GOVERNMENT DEFENDS REFORMS
Tinubu’s administration argues that the difficult reforms were unavoidable after years of policies that created fiscal and foreign-exchange distortions.
Finance Minister Taiwo Oyedele described the previous period as one in which Nigeria was living in “fiscal illusions”, arguing that the country needed to confront its economic problems to move forward.
Investors similarly argue that the reforms could eventually create the conditions for lower inflation, reduced interest rates and stronger economic growth.
But the political challenge for Tinubu is increasingly clear: convincing Nigerians that the eventual benefits of reform will reach households that are struggling to pay for food, housing, transport and electricity today.
“When inequality persists, it becomes dangerous, ” Oyedele said. “It's like sitting on gunpowder; it explodes.”
For Nigeria’s government, the coming months will therefore be crucial. The success of its economic programme may ultimately be judged not only by rising stock prices and foreign investment, but by whether ordinary Nigerians begin to feel an improvement in their daily lives.
Source: Reuters
Reporting: Libby George, Abraham Achirga, Rodrigo Campos & Emmanuel Bruce
Editing: Dhara Ranasinghe & Emelia Sithole-Matarise