GDP grows 4.2%, but Nigerians still wait for jobs, relief

Nigeria’s economy is expanding, government revenues are rising, and foreign exchange reserves have strengthened, but the real test of the country’s economic reforms is whether the recovery can create better jobs, lift household incomes and make food, transport and other essentials more affordable.

The economy grew by 4.2 per cent in the first half of 2026, up from 3.9 per cent in the corresponding period of 2025 and 3.5 per cent in 2024, according to the World Bank’s latest Nigeria Development Update. The bank projects average annual growth of 4.4 per cent between 2026 and 2028, provided the government sustains reforms, improves public services and creates better conditions for private investment.

But stronger output does not automatically translate into better living standards. For millions of households, the economic recovery is still being tested against the cost of food, transport, electricity, rent and other daily expenses.

The World Bank itself acknowledges the gap. While describing Nigeria’s economy as resilient, it says the priority must now shift from restoring macroeconomic stability to achieving faster, more inclusive growth that creates jobs, reduces poverty and improves living standards.

The distinction matters. Growth measures the expansion of economic output; it does not, by itself, reveal how many decent jobs have been created, whether wages have kept pace with prices or whether small businesses are selling more after accounting for rising operating costs.

The latest inflation figures illustrate the challenge. Headline inflation eased marginally to 15.39 per cent in August, while food inflation fell to 19.57 per cent from 20.31 per cent in July. Although the moderation is encouraging, it means prices are generally rising more slowly, not that the cost of living has returned to earlier levels.

Food remains a major pressure point for household budgets, particularly among low-income earners who spend a large share of their income on necessities. A decline in the rate of price increases may improve the outlook, but families will need sustained moderation alongside stronger earnings before they experience meaningful relief.

Poverty figures underline the scale of the challenge. The World Bank estimated that 69.6 per cent of Nigerians lived below the lower-middle-income poverty line of $4.20 a day in 2025, while 50.8 per cent, or about 123 million people, lived in extreme poverty under the applicable international poverty measure.

The bank says the poverty rate stabilised for the first time since 2019, but expects any decline to be gradual. Stabilisation is an important change in direction; it is not yet evidence that millions of households have escaped poverty.

Growth has been driven largely by services, alongside a stronger contribution from agriculture. Sustaining that expansion will be essential, but its poverty-reducing impact will depend on whether businesses can turn increased activity into productive employment, higher wages and greater local production.

Manufacturers need reliable electricity, affordable finance and predictable access to raw materials. Farmers need irrigation, storage, transport infrastructure and markets that reward higher production. Small businesses need operating costs low enough to expand, employ workers and retain a reasonable share of their revenue.

Without these conditions, growth can coexist with weak purchasing power. Businesses may record higher nominal sales because prices have increased, even where the volume of goods sold has barely improved. Workers may also earn more in naira while finding that their income buys less.

The government’s own revenue performance provides an opportunity to change that outcome. The World Bank reported that gross federation revenue increased by 69 per cent in real terms between 2023 and 2025, while aggregate state revenues rose by about 93 per cent in real terms over the same period.

State capital expenditure also expanded, with its share of total spending rising from 46 per cent to 61 per cent. Yet education’s share of state expenditure fell from 14.9 per cent in 2021 to 12.1 per cent in 2025, while health spending remained broadly stable at about seven per cent. Social protection’s share increased from 1.4 per cent to 4.4 per cent.

The figures raise a critical question about the quality of public spending. More revenue creates room to build roads, improve electricity infrastructure, strengthen schools and healthcare, and protect vulnerable households. But the economic returns depend on whether the money reaches priority needs and produces measurable improvements in public services and productivity.

World Bank Country Director for Nigeria, Mathew Verghis, has stressed that better spending efficiency, accountability and service delivery will be essential to ensuring that additional public resources improve people’s lives.

The policy challenge is therefore no longer simply to grow the economy or raise more revenue. It is to ensure that both translate into more productive jobs, stronger businesses and better essential services.

The World Bank expects inflation to decline towards 12 per cent by 2028 and poverty to begin falling gradually, but those outcomes depend on sustained reforms and faster private-sector-led job creation.

Nigeria’s economic scorecard will ultimately be judged not only by its growth rate, reserve levels or government revenues, but also by whether workers can support their families, businesses can expand without crippling costs and households can afford the essentials.

Until those improvements become visible in everyday life, economic growth will remain an encouraging headline whose promise many Nigerians are still waiting to feel.