Working Class Struggles as Inflation Erases Purchasing Power in Nigeria

Inflation in Nigeria has reached a 28-year high, severely affecting the purchasing power of many middle-class workers. Gbemisola Ademola, a 44-year-old accountant and mother of five, once able to stock up on food and buy clothing for her family, now struggles to purchase even the basics. Her monthly income of N300,000 no longer stretches far enough to cover her needs, with prices for everyday items surging.

“I now shop for a meal as I cannot afford to stock up as I usually did,” Ademola explained. “Buying new clothes for my children and going to the mall which we usually did are now luxury,” she added, highlighting the impact of inflation on her once-comfortable lifestyle.

Likewise, Ekechi Chukwuka, a 35-year-old salesman earning N250,000 monthly, is finding it increasingly difficult to make ends meet for his family of four. With soaring food and transportation costs, Chukwuka is facing further uncertainty, as his employer has announced a freeze on salaries amid a company restructuring. “This Christmas is going to be tough as I won’t be getting any salary or bonuses amid surging prices of everything,” he said.

The strain felt by Ademola, Chukwuka, and millions of other Nigerians is reflective of the broader economic challenges the country faces. Real wages have plummeted by over 100 percent, leading to a significant decline in the purchasing power of the middle class. This has contributed to the erosion of consumer confidence and purchasing habits, with Nigerians now focusing on necessities while cutting back on non-essential purchases.

According to the latest Manufacturers Association of Nigeria (MAN) report, inventory of unsold products in the manufacturing sector rose to N1.24 trillion in the first half of 2024, marking a staggering 357.6 percent increase from the previous year. This reflects a shift in consumer spending, where Nigerians are buying only a fraction of what they used to.

Experts point to a combination of factors driving the crisis, including the removal of subsidies, the devaluation of the naira, and the worsening effects of climate change and insecurity. These have compounded the financial strain on Nigerians, pushing inflation rates to 33.8 percent as of October 2024.

The World Bank has warned that the loss of purchasing power is contributing to rising poverty levels, with 129 million Nigerians now living below the national poverty line. Additionally, over 133 million Nigerians are considered to be in multidimensional poverty, experiencing significant deprivation in areas such as health, living standards, and work.

Marketing professor Uchenna Uzor noted, “The Nigerian middle class has been seriously affected and disappearing due to stagnated income and surging prices.” While consumption patterns have shifted, he emphasized that many Nigerians continue to maintain their purchasing behavior despite having to buy less.

As inflation continues to rise, the National Bureau of Statistics reports that nearly two-thirds of Nigerians are now struggling with basic survival, unable to save or invest. Femi Egbesola, president of the Association of Small Business Owners of Nigeria, further stressed that as real wages decline, the ability of employees to sustain their day-to-day lives becomes increasingly untenable.

This economic crisis is not only reshaping Nigeria’s middle class but also leaving millions of Nigerians facing difficult choices as they navigate an ever-rising cost of living.

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Reporting by David Okoroafor, News Writer in Lagos, Nigeria.