Nigeria’s consumer economy is showing renewed signs of life as households, after months of financial strain caused by inflation and currency volatility, are gradually increasing their spending across key segments of the economy. New data from the Central Bank of Nigeria indicates that private consumption which accounts for more than 60 percent of the country’s GDP expanded significantly in the last quarter, suggesting that Nigerian families are cautiously regaining confidence in their financial footing.
The improvement reflects a larger macroeconomic shift. Over the past year, Nigerians have navigated rising transport fares, elevated food prices and fluctuating energy costs. While these pressures remain acute, analysts say the resilience of the country’s consumer base is now becoming more visible. The CBN’s latest Household Consumption Index shows a multi-point rise compared to the previous quarter, with spending growing most strongly in food, essential services, telecommunications and informal market activities. According to a BusinessDay economic review cited within the report, analysts noted that consumption levels “appear to be stabilising as household expectations improve and income pressures moderate.”
Economists say this consumption rebound matters for two major reasons. First, Nigeria’s economy is primarily driven by the spending habits of its 200-million strong population. When consumers cut back, GDP growth slowed sharply, a trend the country experienced throughout 2023 and early 2024. Second, private sector investment tends to rise when companies observe stronger demand for goods and services. The new CBN figures therefore arrive at a time when policymakers are seeking clearer signals of recovery following several quarters of subdued growth.
The return of consumer activity was not unexpected. Over the past six months, a combination of policy adjustments including exchange-rate reforms, targeted fiscal support for agriculture and improvements in FX liquidity have begun to filter through to the real economy. Although inflation remains high, month-on-month inflation has begun to ease, offering households some breathing space after months of rapid cost increases.
Retail and FMCG (fast-moving consumer goods) companies say they are beginning to see more foot traffic and stronger volumes. Large supermarket chains in Lagos, Abuja and Port-Harcourt report a rise in weekday purchases and small increases in average customer spend. Informal sector operators, the backbone of Nigeria’s daily commercial life also note that more Nigerians are buying household staples in moderate quantities again rather than in the ultra-conservative portions that characterised the early inflation spike.
Transportation spending has also risen, especially in urban centres. Commuters appear to be adjusting to new fare levels, and many have resumed normal travel routines after months of avoiding non-essential movements. Transport unions say the growth is still modest but consistent.
Telecommunications companies, meanwhile, report higher data usage and increased subscriptions, a trend they attribute partly to the growing adoption of remote work and digital services. Nigerians continue to rely on mobile internet for banking, entertainment, commerce and communication, making data expenditure one of the more resilient categories throughout the economic adjustment period.
Another factor supporting consumption is the expansion of salary payments in both public and private sectors. Several state governments have either cleared backlogs or introduced partial wage increases to help citizens cope with inflation. Private companies, especially in banking, technology, manufacturing and consulting, have implemented cost-of-living salary reviews. These adjustments, while uneven across sectors, have boosted disposable income for millions of workers.
At the same time, remittances from Nigerians abroad remain robust. The World Bank recently highlighted the resilience of Nigeria’s diaspora inflows in its latest global remittance update, noting steady transfers to households for education, health, feeding and housing support. These inflows continue to cushion families from the worst effects of inflation.
However, analysts emphasise that the consumption recovery remains fragile and dependent on continued macroeconomic stability. “The momentum we are seeing could reverse quickly if inflation spikes again or if currency pressures resurface,” warns a Lagos-based economist. For many Nigerians, spending decisions remain conservative, guided by a “necessity-first” mindset that prioritises essential goods and services over discretionary purchases.
The report notes that middle-income households are the primary drivers of the rebound, while low-income households remain heavily constrained by rising costs. In rural areas, consumption growth has been slower due to weaker incomes, limited infrastructure and higher transportation burdens affecting the movement of goods.
Looking ahead, experts say Nigeria must sustain policies that support real incomes, reduce supply bottlenecks and strengthen domestic production. Improvements in agriculture, manufacturing and energy supply will play a major role in determining whether the current consumption rebound becomes a long-term trend.
For now, the CBN’s data offers a cautiously optimistic picture: Nigerian consumers, despite significant cost pressures, are demonstrating resilience and adaptability. And for businesses from informal traders to large corporations this renewed spending may signal the beginning of a more stable growth cycle.
