Nigeria's cost-of-living crisis tests Tinubu ahead of elections

For Grace Adama, a health worker in Abuja, each payday brings little relief. Her monthly salary of 135,000 naira — nearly double the national minimum wage — now barely covers a week of expenses. "If I'm paid today, my salary stays with me just for one week," she said. "If you see the cost of living, house, electricity, everything has gone up."

Adama's experience reflects a broader squeeze across Africa's largest oil exporter. Since President Bola Tinubu took office, his administration has removed fuel subsidies, devalued the naira, and cut electricity subsidies — reforms designed to pull the country back from fiscal crisis. The government and investors argue these measures are essential for long-term stability.

But the immediate impact has been severe. According to an index by Lagos-based SBM Intelligence, the cost of making a pot of jollof rice — a staple dish — has more than doubled since Tinubu assumed office. Petrol prices have risen sixfold following the subsidy removal, compounded by a weaker naira and higher global oil prices.

The World Bank estimates that just over half of Nigeria's population lived in poverty last year, up from roughly 42% in 2022. Public frustration has earned Tinubu the nickname "T-Pain." A June sentiment tracker by SBM Intelligence found that 80% of Nigerians believe the country is moving in the wrong direction, with security concerns and rampant kidnapping topping the list of worries.

Investor sentiment tells a different story. Foreign capital inflows reached a six-year high of $23 billion last year, according to the National Bureau of Statistics. The Nigerian stock exchange has risen nearly 60% this year, and the opening of the 650,000-barrel-per-day Dangote oil refinery near Lagos has drawn praise. "This is the most positive investors have been about Nigeria probably in the last two decades," said Thys Louw, a portfolio manager at investment firm Ninety One. "They're taking the tough medicine now."

Yet the benefits of these reforms remain out of reach for most citizens. Fewer than 5% of Nigerian adults invest in capital markets, and the inflows are largely "hot money" — short-term Treasury bills and financial assets that can be quickly sold. Businesses and individuals struggle to secure affordable loans, with the central bank's key interest rate at 26.5% as it battles near-16% inflation.

For Lagos food seller Eji Uchenna, the solution is simple: "The government should bring the fuel price down." His customers can no longer afford to buy in bulk.

Adama has cut meat from her diet, moved to a smaller apartment, and still relies on short-term loans to pay bills. She can no longer send money to her aged mother in Benue state. "I can't do a lot of things that I used to do before," she said.

Tinubu must convince voters that the reforms will eventually benefit them before elections in January. Finance Minister Taiwo Oyedele acknowledged the government must do more to ensure "prosperity for all Nigerians," warning that persistent inequality is dangerous. "It's like sitting on gunpowder; it explodes."

While public anger is palpable, analysts note that a fragmented opposition may limit its political impact. SBM's Chief Executive Cheta Nwanze said the opposition would need to unite to unseat Tinubu. If the government sticks with its policies, investors like Louw believe workers should eventually benefit as inflation falls and interest rates ease — but for now, the gap between market optimism and daily hardship remains stark.