Nigeria is growing again, but why are citizens not feeling it?

Nigeria’s economy grew by 3.89 per cent in the first quarter of 2026. But that figure means quite little to many Nigerians. They do not see themselves in the growth process. In another time, that number would have been greeted with celebration. Government officials would point to it as evidence that the economy was gaining momentum. Investors would see it as proof that reforms were beginning to work. Economists would describe it as a sign of recovery. Yet if you stopped 10 Nigerians on the street and told them the economy was growing at nearly four per cent, many would probably look at you in disbelief. “Growing?” they are most likely to retort. After all, a growing economy reflects on the standards of living of the people. So, if many of them seem to have been untouched by the growth process, that growth is unlikely to make sense to them. The trader struggling to restock her shop would disagree. The civil servant whose salary now buys less food than it did two years ago would disagree. The manufacturer battling high energy costs would disagree. So would the graduate still searching for work wonder where exactly that growth is taking place. This is one of the great puzzles of the Nigerian economy today. The economy is growing, but many Nigerians do not feel better off. In truth, there is no contradiction. Economic growth and economic welfare are not always the same thing. Gross Domestic Product, or GDP, measures the value of goods and services produced in an economy. It tells us whether economic activity is expanding or contracting. But one of its defects is that GDP does not tell us how the gains from that activity are distributed, whether jobs are being created fast enough, or whether living standards are improving. An economy can grow while households struggle, which is the case with many Nigerians right now. Nigeria has experienced this before, but the disconnect feels particularly sharp today because the country is emerging from one of the most severe cost-of-living shocks in recent history. A real recovery from the depths to which the economy has fallen will require a significant push, something close to double-digit growth, to make a noticeable impact on the standards of living of the people. Three years ago, the government embarked on ambitious reforms that have reshaped the economy. The reforms removed fuel subsidies and liberalized the foreign exchange market. Consequently, interest rates rose sharply as inflation increased. While these measures were generally necessary to correct long-standing distortions, they also imposed high costs on households and businesses. The result was a dramatic erosion of purchasing power, and although inflation has begun to slow, prices remain far higher than they were before the reforms. This explains in part why Nigerians cannot feel the impact of a four per cent growth rate. Food costs have surged, just as transportation has become more expensive. School fees, rent, electricity bills, and healthcare expenses consume a larger share of household income. So, where is the growth? For most Nigerians, and indeed, for consumers generally, the economy is not measured by GDP reports. It is measured by what is left after paying the month’s bills, and the reality they feel after the subtraction is done explains why many people do not feel the recovery process that is going on right now. Part of the explanation lies in the type of growth the economy is generating. Growth does not affect people’s lives in the same way because sources of growth differ. According to the latest GDP figures, much of the expansion in the first quarter came from services, particularly telecommunications, financial services, and other modern sectors of the economy. These industries are important. They generate income, attract investment, and contribute significantly to national output. But they do not always create jobs on the scale that agriculture, manufacturing, construction, and small businesses do. A telecom company can add billions of naira to GDP without hiring thousands of new workers. Just in the same way, a bank can increase profitability through technology and efficiency without dramatically expanding its workforce. Consequently, economic growth can occur without a corresponding improvement in employment opportunities, a situation that economists call jobless growth. For millions of young Nigerians entering the labour market every year, growth matters only when it creates opportunities. This is why rising GDP figures offer little comfort to someone unable to find stable work. There is yet another reason why the current recovery feels incomplete. Consumption remains under pressure. When economists say that households are the engine of an economy, they emphasise the fact that when families spend, businesses earn revenue, and when businesses earn revenue, they invest and hire. The cycle reinforces itself and drives economic growth. Right now, this cycle has weakened. After two years of exceptionally high inflation, many households have shifted from spending to survival. The question many Nigerians are asking is when growth will begin to show up in their own lives. Until that happens, the recovery will remain visible in the statistics long before it becomes visible at the dinner table.