Economists Explain Why 3.98% GDP Growth Fails to Impact Nigeria’s High Living Cost

Nigeria’s economy achieved a sustained growth rate of 3.98 percent in the third quarter of 2025, according to the latest figures released by the National Bureau of Statistics (NBS) on Monday. This consistent expansion was primarily driven by the non-oil sector, with robust contributions from agriculture and services, propelling Africa’s largest economy forward.

Dependable NG reports that while the country’s macroeconomic performance is commendable—with the real GDP standing at N57.03 trillion—financial experts are highlighting a crucial problem: this growth is not translating into tangible relief for ordinary citizens, whose cost of living remains alarmingly elevated. Analysts argue that this failure stems from a poor transmission mechanism connecting the top-line economic gains to household welfare.

In separate interviews conducted with leading financial commentators, including Gbolade Idakolo (CEO of SD & D Capital Management), former CIBN President Prof. Segun Ajibola, Mazi Okechukwu Unegbu, and Prof. Godwin Oyedokun, the deep-seated issues preventing the growth from reaching the marketplace were discussed.

Structural Challenges Weaken Microeconomic Impact — Prof. Ajibola

Prof. Ajibola labeled the steady GDP expansion as positive, particularly given the strong showing from real sectors like agriculture. Despite observing some recent drops in food prices, he maintained that high costs associated with transportation, energy, storage, and persistent security issues continue to inflate the general cost of living.

He emphasized that the “weak transmission mechanisms” between national economic gains and the average Nigerian’s welfare remain a critical obstacle. Prof. Ajibola asserted: “It will require synchronized efforts across monetary, fiscal, and political spheres to strengthen the links between the nominal and real segments of the economy so that the benefits of growth can finally trickle down to the mass of the people.”

N70,000 Wage Insufficient Despite Agricultural Gains — CEO Idakolo

Gbolade Idakolo recognized that the latest data reflects the success of targeted agricultural policies, citing initiatives like the Lagos–Kebbi partnership. However, he cautioned that the economic reality for most households is still severe.

Idakolo stressed that the current minimum wage of N70,000 is still grossly inadequate for households struggling with current prices of essential goods. He noted that even with higher agricultural output leading to minor price drops, the gap between market prices and purchasing power shows why “most Nigerians still find it difficult to meet their basic feeding needs.”

Growth Must Be Felt to Matter to Households — Prof. Oyedokun

Prof. Godwin Oyedokun described the 3.98% GDP figure as presenting a “mixed picture,” confirming that the positive statistics feel remote from the daily struggles of most citizens. He acknowledged that the agriculture-led expansion indicates increased output, but this has not translated into lower costs for the consumer.

He detailed that structural factors like insecurity, logistics bottlenecks, high energy prices, and inadequate infrastructure persistently push up costs, even when production improves. He argued that the growth is not yet inclusive: “Wages are not keeping pace with inflation, so even in a growing economy, households feel poorer.”

Statistical Improvement Requires Caution — Unegbu

Mazi Okechukwu Unegbu advised Nigerians to view the latest GDP data carefully. While acknowledging numerical improvement, he suggested the figures might not entirely capture the current economic reality on the ground. “The GDP growth rate in Q3 2025 of 3.98 percent—these are statistics anyway. It may not represent the real part because by the time you see the statistics, a lot of water has passed under the bridge. But at the same time, I think Nigeria is progressing, except that we cannot see the impact in the marketplace,” Unegbu concluded.