Nigeria’s recovery has begun; why doesn’t it feel like one?

If Nigeria’s economy is recovering, why does life still feel so difficult for so many people? This is a question increasingly asked in homes, markets, offices, and boardrooms across the country. On one hand, economists and policymakers point to encouraging signs that the economy is beginning to stabilise. Inflation has moderated from the exceptionally high […]

If Nigeria’s economy is recovering, why does life still feel so difficult for so many people?

This is a question increasingly asked in homes, markets, offices, and boardrooms across the country. On one hand, economists and policymakers point to encouraging signs that the economy is beginning to stabilise. Inflation has moderated from the exceptionally high levels reached after the major reforms. External reserves have strengthened, the balance of payments has returned to surplus, capital inflows have recovered, and international investors are once again paying closer attention to Nigeria. By the conventional indicators used to measure macroeconomic performance, the country appears to have turned an important corner.

Yet this is not how many Nigerians experience the economy. Families continue to struggle with the cost of food, transport, and education. Small businesses remain under pressure from high operating costs, while many workers find that their salaries still buy significantly less than they did only a few years ago. For millions of households, the language of economic recovery sounds disconnected from everyday reality because the burdens of daily life remain stubbornly heavy.

The apparent contradiction exists because the word recovery is often used to describe two very different realities. Economists usually refer to the recovery of the economy as a system, while ordinary citizens judge recovery by the condition of their own lives. The first is measured through indicators such as inflation, foreign exchange reserves, fiscal balances, investment flows, and economic growth. The second is measured by questions that require no statistical tables to answer: Can I afford enough food? Can I pay school fees without borrowing? Is my business growing? Has my standard of living improved? Both perspectives are valid, but they do not move at the same speed.

History shows that countries undergoing major economic reforms almost always experience this gap. Financial markets and macroeconomic indicators often improve first because they respond quickly to changes in policy and investor confidence. Households, however, recover much more slowly because employment, wages, and business expansion take time to respond. In other words, an economy can begin to stabilise long before its citizens begin to feel prosperous.

This distinction between stabilisation and prosperity is one of the most important ideas in economics, yet it is rarely explained in public debate. Stabilisation repairs the foundations of an economy. It reduces uncertainty, restores confidence, and creates conditions in which businesses are more willing to invest. Prosperity, however, is built on those foundations. It emerges only when investment leads to higher productivity, stronger businesses, better jobs, rising incomes, and improving living standards. Nigeria is still making that journey.

One reason many people remain unconvinced by claims of recovery is that inflation, although lower than before, continues to be widely misunderstood. A decline in inflation does not mean prices are falling. It simply means prices are rising more slowly. For instance, Nigeria’s inflation has fallen from 34.8 per cent in December 2024 to 15.93 per cent in May (the NBS will announce a new rate today, June 15). Yet the cost of food, transport, and other essentials is still increasing; the pace of those increases has merely slowed. Families therefore continue to live with the cumulative effect of the sharp price increases experienced over the past three years, even as economists welcome the gradual moderation in inflation.

The same pattern applies to incomes. Businesses recovering from a period of economic uncertainty rarely increase salaries or expand employment immediately. They first seek to rebuild profitability, strengthen their balance sheets and regain confidence that the improvement will last. As a result, household purchasing power often remains weak long after the broader economy begins to stabilise. That explains why economic statistics and public sentiments frequently move in opposite directions during the early stages of recovery.

This is why the next phase of economic policy may prove even more important than the reforms that produced the initial stabilisation. Restoring confidence in financial markets is necessary, but it is not sufficient. Nigeria must now focus on raising productivity by improving electricity supply, transport infrastructure, education, public security, digital connectivity, and the broader environment in which businesses operate. Sustainable prosperity is created not by better statistics alone but by enabling firms to invest, workers to earn more, and households to experience steady improvements in their quality of life.

That is the challenge before the country today. Nigeria has made meaningful progress in restoring macroeconomic stability, and that achievement deserves recognition. But policymakers should resist the temptation to confuse stabilisation with success. The ultimate purpose of economic policy is not to produce impressive indicators but to improve the lives of citizens.

An economy has not fully recovered just because the numbers have improved. It has recovered when ordinary people no longer need economists to tell them that it has.