‎ A crippling reality: Nigeria’s projected growth vs. harsh economic conditions

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‎By Caleb Ohaeri

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‎Nigeria located in the strategic sub-Saharan western part of Africa, is the most populous black nation on earth with over 250 ethnic groups and the largest oil producer in Africa ranked 16th largest in the world and even exceeding the required Organization of the Petroleum Exporting Countries (OPEC) Quota in 2025. Currently, the second largest economy in Africa after South Africa with a valuation of 365 billion having 60% of its population below 40 years has gone from a booming emerging economic powerhouse into a struggling nation over the last decade.
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‎We look into the perks and cons of the decline and how it affects day-to-day living amongst most Nigerians, especially middle-income and low-income earners. We look at the term “purchasing power parity” and then make a comparison with the economy.
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‎Purchasing power parity (PPP) is a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries’ currencies. PPP is effectively the ratio of the price of a market basket at one location divided by the price of the basket of goods at a different location. The PPP inflation and exchange rate may differ from the market exchange rate because of tariffs, and other transaction costs.

The purchasing power parity indicator can be used to compare economies regarding their gross domestic product (GDP), labor productivity and actual individual consumption. Is high Purchasing power parity good or bad? A high Purchasing power parity suggests higher buying power, which is typically regarded as desirable to the vast population since it signifies more affordability of goods and services in a nation both to the low-income earners middle class and high-income earners. Purchasing power parity resonates with the current currency exchange rate and inflation.

Presently according to the current exchange rate the naira < dollar is 1600₦ to 1$. This has significantly affected the price of imported goods as Nigeria is an import-dependent nation importation cost VAT, customs duties and other logistics costs is added to the prices of these essential goods which leads to soaring prices when made available to the final consumer, let's take a typical example to resonate with the decline in purchasing power parity, ‎ ‎In 2015 With 200₦ one could afford to purchase a bottle of minerals ( coke, Fanta, sprite), snacks and a bottle of water for a fast meal, but today a bottle of Coke goes for 500₦, which is a tremendous price increase in the same basic food items when income earning has remained fixed. The Federal govt in May 2024 increased the minimum wage salary to ₦70,000 in a bid to alleviate the financial burden of the average Nigerian which many have argued to have less impact on the desperancy experienced by average Nigerians. ‎ ‎Once upon a hundred naira. To take a walk down memory lane In 1973, ₦100 could buy you 20 bags of rice. ‎ ‎Today, it buys two sachets of pure water. (Pure water aka sachet water is drinking water packaged in heat-sealed plastic sachets. It usually holds around 35cl of drinking water) ‎ ‎This isn’t just inflation—it’s a story of value lost over time, of economic mismanagement, missed opportunities, and how the dreams we held for Nigeria in 1960 have thinned every year after that. For a bit of historical context, Algeria, which gained independence just two years after Nigeria, now has a currency that’s 12 times stronger and an economy that overtook Nigeria’s in 2024. ‎ ‎The immediate past President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has warned that Nigeria is facing a deeper economic regression than many realize, stating that with a current GDP per capita of just $824, Nigerians are significantly worse off than they were at independence in 1960. Worse yet, an estimated 13 million more Nigerians are projected to, by the end of 2025, join the existing 129 million others living below the poverty line due to ongoing inflation, according to the World Bank. Worse yet, an estimated 13 million more Nigerians are projected to, by the end of 2025, join the existing 129 million others living below the poverty line due to ongoing inflation, according to the World Bank a recent CAPPA statement reflected. To put more into reflection. ‎ ‎According to the statement of the senior special assistant to the president on media and publicity in the words of President Bola Tinubu, leveraging the nation’s population and resources, with a main focus on unleashing Nigeria’s full economic potential, his administration’s Renewed Hope Agenda can build a trillion-dollar economy within the next decade. ‎ ‎This, the President noted, can be further facilitated by ongoing efforts on job creation, access to capital for small and large businesses, inclusiveness, the rule of law and the fight against hunger, poverty and corruption, President Tinubu spoke on Tuesday in Abuja during the opening session of the 2023 National Engineering Conference, Exhibition and Annual General Meeting of the Nigerian Society of Engineers (NSE). ‎ ‎The President who was represented at the event by his deputy, Vice President, Kashim Shettima, maintained that with its rich population and resources, Nigeria can become a trillion-dollar economy within the next ten years. He however expressed disbelief that the ambitious target could be achievable without taking into account the importance of the key elements encapsulated in the theme of the NSE Conference, “Manufacturing, Competitiveness and Economic Growth”. ‎ ‎The Renewed Hope Agenda of my administration is defined by our commitment to unleashing our country’s full economic potential, by focusing on job creation, access to capital for small and large businesses, inclusiveness, the rule of law, and the fight against hunger, poverty and corruption,” President Tinubu declared. The President stated that he was not unmindful of the hardships being most Nigerians are enmeshed in, noting however that “the difficult times are indeed temporary, but the benefits will be permanent.” ‎ ‎As the economic hardship gripes and savings get erased as a result of the cost of living, the end goal and solution seem far in sight as most Nigerians get swayed by the wind of opinion. ‎ ‎ ‎ ‎ ‎