Dear Subscriber,
Happy statistics, unhappy people
Nigeria’s macroeconomic dashboard is flashing green, yet the mood on the streets remains unmistakably grim. Official data suggests a remarkable turnaround: unemployment is down to 4% from a high of 33%, while inflation is now cooling sharply after hitting a three-decade high of 35% in December 2024.
In February, inflation moderated for a second consecutive month to 23.2%, following a data overhaul in January that brought it down by almost 11% to 24.5%.
Yet, the lived reality of most Nigerians tells a different story. Anecdotal evidence suggests that while inflation is slowing, the pace of moderation may not be as swift as official data implies. And let’s be clear: decelerating inflation does not mean prices are falling—it simply means they are rising at a slower rate. Purchasing power remains at rock bottom, and corporate sales have yet to stage a meaningful recovery.
Consumer spending is rebounding in 2025
As Milton Friedman aptly put it, “Inflation is taxation without legislation.” The past year has felt like an era of unlegislated taxes, with subsidy removals, currency devaluations, and excessive fiscal deficits pushing household budgets to the brink. According to the Economist Intelligence Unit (EIU), annual household income plummeted 17% in 2024 to $5,280, down from $6,380 in 2023. The impact on consumer spending was severe: consumption expenditure nearly halved, falling from $237 billion to $122 billion, while retail sales slumped 43.6%, leaving many corporates struggling to return to pre-pandemic levels.
But could there be a flicker of hope on the horizon? Consumer spending is showing early signs of recovery in the first quarter of 2025. In February 2025, consumers’ confidence index showed a decrease in pessimism, rising from -23.5 index points in the previous month to -19.
The EIU projects a 4% rebound in retail sales in 2025, with consumer spending expected to recover modestly to $127 billion.
Where there is electricity, there is productivity
Nigeria’s productivity crisis is, at its core, an energy crisis. A nation of about 230 million people operates on a power grid that barely musters 5,000MW, a fraction of its estimated 30,000MW requirement. Nigeria’s electricity consumption per capita is 182kWh compared to 3,670kWh in South Africa, 3,430kWh in Brazil and 1,910kWh in Egypt.
Yet, Nigeria’s power crisis is a paradox of scarcity in the midst of plenty. The country boasts of vast untapped renewable energy potential, with experts estimating that solar, wind, and hydro resources could generate over 60,000MW.
In this edition of FDC Whispers, we cut through the noise, providing a clear picture of Nigeria’s power policies, including possible forbearance.
Enjoy your read!
