Nigerian households sharply reduced their real spending in 2024 as inflation eroded purchasing power, according to provisional data from the Central Bank of Nigeria’s latest statistical bulletin.
Figures on Gross Domestic Product by expenditure show that household final consumption at constant 2010 prices fell from N45.41tn in 2023 to N31.12tn in 2024 — a real decline of about N14.29tn or roughly 31 per cent. The contraction indicates that families consumed significantly fewer goods and services, not merely that prices increased.
By contrast, household consumption at current prices rose from N146.69tn to N173.01tn over the same period. This means Nigerians spent more money in nominal terms but received less value, highlighting the depth of inflationary pressure on household budgets.
The trend aligns with Nigeria’s sustained double-digit inflation in 2024, which began the year at 29.90 per cent in January and climbed to about 34.80 per cent by December. Rising food, transport, energy and accommodation costs forced many households to prioritise basic needs while cutting discretionary spending.
Real earnings also weakened. Compensation of employees at constant prices declined from N28.27tn in 2023 to N25.48tn in 2024, a drop of nearly 10 per cent. Although nominal wages rose, the increases failed to keep pace with inflation, leaving workers worse off in real terms.
Reacting to inflation data earlier in the year, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, warned that purchasing power continued to slump. “Regrettably, the major inflation drivers are not receding; if anything, they have become even more intense,” he said, citing exchange rate weakness, high transport costs, insecurity and supply-side bottlenecks.
Similarly, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said inflation had reduced profitability and discouraged investment. “Inflation has led to a loss of consumers’ purchasing power, increased production costs, and a reduction in profitability,” he said.
The World Bank estimates that low labour income and high inflation pushed about 14 million Nigerians into poverty in 2024, with nearly 47 per cent of the population now living below the $2.15-a-day poverty line. While the government has introduced temporary cash assistance for vulnerable households, the Bank stressed that sustained reforms are needed to stabilise prices, raise incomes and restore household consumption.
