Nigeria’s economy is showing signs of renewed growth and greater macroeconomic stability, but millions of households and small businesses are yet to feel the full impact of the recovery.
Real Gross Domestic Product (GDP) expanded by 3.89 per cent year-on-year in the first quarter of 2026, up from 3.13 per cent in the corresponding period of 2025, with non-oil activities, services, finance and telecommunications contributing to the expansion.
Foreign exchange reserves have also risen above $45 billion, while headline inflation has gradually eased from its previous highs.
The developments have provided fresh support for the Federal Government’s argument that its economic reforms—including the removal of petrol subsidies, foreign exchange reforms and changes to tax administration—are beginning to deliver results.
Yet, behind the improving headline figures is a more complicated picture. Many Nigerians continue to grapple with high food prices, expensive transportation, elevated energy costs and reduced purchasing power.
For salary earners, the improvement in economic indicators has not necessarily translated into a meaningful improvement in living standards.
Although inflation has slowed, the cumulative increase in the prices of food, housing, transportation, healthcare and other essentials remains significantly higher than before the current reform cycle.
Workers who have received wage increases are also facing rising electricity, transportation and household expenses, leaving many with little additional disposable income.
The result is an economy where growth is returning, but household purchasing power remains under considerable pressure.
Small traders and retailers are also experiencing the impact of tighter household budgets.
With consumers prioritising essential goods, merchants say sales volumes have become increasingly dependent on the purchasing power of customers.
At the same time, the cost of replenishing inventory has risen sharply, forcing many traders to operate with larger working-capital requirements while accepting smaller profit margins.
For many businesses, a more stable exchange rate provides some relief, but it has not completely reversed the cost increases accumulated over recent years.
Small and medium-sized enterprises remain among the most vulnerable groups in the current economic environment.
High borrowing costs have made access to credit increasingly expensive, while electricity tariffs, diesel prices, transportation expenses and other operating costs continue to squeeze profit margins.
For manufacturers, artisans and service providers, the combination of expensive credit and high operating costs can make expansion difficult even when overall economic growth is improving.
The challenge is particularly significant because SMEs account for a substantial share of employment and economic activity across the country.
Agriculture presents another mixed picture.
Higher prices for food, livestock and some commercial crops have improved revenues for certain farmers and large-scale agricultural businesses. However, smallholder farmers continue to face significant challenges.
The rising cost of fertiliser, seeds, transportation and other farm inputs has reduced the benefits of higher farmgate prices.
In some rural communities, insecurity remains an additional obstacle, limiting access to farmland and disrupting the movement of agricultural products to major markets.
Investors, particularly those operating in Nigeria’s fixed-income and financial markets, have benefited from some of the changes accompanying the economic adjustment.
High yields on government securities, improved foreign-exchange liquidity and greater confidence in the clearing of outstanding FX obligations have helped strengthen investor interest.
The naira’s relative stability has also made it easier for some foreign investors to assess potential returns and repatriation risks.
However, sustained investor confidence will depend on whether the improvements in the foreign-exchange market and broader macroeconomic environment can be maintained.
Large corporations and multinational companies have generally been better positioned to navigate the difficult adjustment period.
Companies with stronger balance sheets, access to foreign currency and greater economies of scale have been able to absorb some of the increases in operating costs while adjusting their business models to the new economic environment.
Banking, telecommunications, oil services and other capital-intensive sectors have particularly benefited from improved access to foreign exchange and the ability to make longer-term investment decisions.
Some large companies are also gaining market share as smaller competitors struggle with financing and operating costs.
Nigeria’s latest economic figures provide evidence that the economy is moving towards greater stability, but the numbers alone do not tell the full story.
For policymakers, stronger GDP growth, rising foreign-exchange reserves and moderating inflation represent important signs of progress.
For households and small businesses, however, the more immediate question is whether those improvements will translate into cheaper food, affordable transportation, lower energy costs, accessible credit and higher real incomes.
The success of Nigeria’s economic recovery may ultimately be judged not only by macroeconomic indicators but by whether ordinary Nigerians begin to experience a sustained improvement in their standard of living.
For now, the country appears to be moving in a more stable economic direction—but the distance between economic recovery on paper and recovery in the household remains significant.