By Arthur Eriye
Nigeria’s macroeconomic indicators are beginning to paint a more encouraging picture. Economic growth is gathering momentum, inflation has eased from its peak, the naira has become more stable, foreign exchange reserves have climbed above $52 billion, and investor confidence is gradually returning.
Yet, for millions of Nigerians, the economy feels anything but strong. Food prices remain elevated, transportation costs continue to strain household budgets, wages have failed to keep pace with inflation, and businesses are still grappling with high borrowing costs and expensive energy. The disconnect between improving macroeconomic data and the lived reality of ordinary citizens has become one of the defining features of Nigeria’s economic recovery.
Economists increasingly describe this contradiction as Nigeria’s productivity puzzle—an economy that is expanding on paper but has yet to translate that growth into broad-based improvements in living standards.
The National Bureau of Statistics (NBS) reported that Nigeria’s real Gross Domestic Product (GDP) grew by 3.89 percent in the first quarter of 2026, up from 3.13 percent in the corresponding period of 2025, driven largely by services, telecommunications, financial services and trade.
The International Monetary Fund (IMF) projects the economy to grow by about 4.1 percent in 2026, one of Nigeria’s strongest performances in recent years, while the World Bank also forecasts growth above four percent.
On the monetary front, inflation has moderated following the rebasing of the Consumer Price Index, while the Central Bank of Nigeria (CBN) has maintained a tight monetary policy stance, keeping the Monetary Policy Rate (MPR) at 26.5 percent to consolidate price stability and support the naira.
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Nigeria’s external reserves have also strengthened, rising above $52 billion, boosting confidence in the foreign exchange market and improving the country’s ability to absorb external shocks.
Ordinarily, such macroeconomic improvements should translate into stronger consumer spending, higher investment and rising household incomes.
But many Nigerians are asking a different question: if the economy is getting better, why does life still feel harder?
The answer lies in the nature of Nigeria’s growth.
Recent GDP expansion has been powered largely by sectors that generate relatively fewer jobs than agriculture and manufacturing. Financial services, telecommunications and parts of the oil sector have recorded strong growth, while sectors that employ millions of Nigerians continue to struggle with high production costs, insecurity, infrastructure deficits and weak consumer demand.
Manufacturers are still contending with borrowing costs that exceed 30 percent in many cases, making expansion difficult despite improving macroeconomic conditions. Small businesses face similar challenges, including rising electricity costs, lingering foreign exchange uncertainties and weak consumer purchasing power.
For households, however, the biggest challenge remains real income. Although inflation has moderated, prices have not returned to previous levels. Food, transportation, healthcare, education and housing all remain significantly more expensive than they were before the sweeping economic reforms of the past three years. Wage growth has largely failed to keep pace with the cost of living, leaving many workers with diminished purchasing power despite easing inflation.
Recognising this disconnect, the Federal Government has shifted its attention beyond headline economic indicators to the impact of reforms on ordinary Nigerians. The administration has introduced a “shared prosperity” scorecard that will measure progress not only by GDP growth but also by improvements in household incomes, poverty reduction, employment creation and inequality. Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, has stressed that restoring macroeconomic stability is only the foundation of economic recovery, adding that the true measure of success will be whether the reforms deliver tangible improvements in the lives of Nigerians.
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Economists broadly share that view, arguing that macroeconomic stability is only the first phase of recovery. The next—and perhaps more difficult—phase is raising productivity.
Nigeria must increase agricultural output, expand manufacturing capacity, improve electricity supply, reduce logistics costs, deepen industrialisation and create higher-value jobs capable of lifting incomes sustainably. Without meaningful productivity growth, GDP may continue to rise while the gains remain concentrated in corporate earnings and government revenues, leaving households with little relief.
The encouraging news is that financial markets are beginning to respond positively to the reforms. Foreign portfolio investors are gradually returning, confidence in the foreign exchange market has improved, and government revenues have strengthened. International institutions such as the IMF, the World Bank and the African Development Bank now project stronger medium-term growth for Nigeria than they did a year ago.
But confidence alone cannot feed families.
The ultimate measure of economic success is not the size of foreign reserves, the pace of GDP growth or the performance of the stock market. It is whether Nigerians can more easily afford food, secure decent jobs, build profitable businesses and enjoy a higher standard of living.
Nigeria has made significant progress in restoring macroeconomic stability.
The greater challenge now is converting that stability into shared prosperity.
That is the real productivity puzzle confronting Africa’s largest economy—and solving it may ultimately determine whether the country’s ongoing reforms are remembered as the beginning of a genuine economic renaissance or simply another period of improving statistics without meaningful improvements in the lives of ordinary Nigerians.
One important factual note: if you plan to publish this in THISDAY, I’d recommend verifying all current macroeconomic figures (GDP growth, inflation, reserves, and the MPR) against the latest NBS and CBN releases before going to press, as those data can change between publication cycles.