Nigeria’s economy saw a 3.46% growth in Gross Domestic Product (GDP) in the third quarter of 2024, according to the National Bureau of Statistics (NBS). The nominal value of goods and services produced climbed from N60.66 trillion to N71.13 trillion on a year-on-year basis, according to the report shared on Monday.

However, when adjusted for inflation, real GDP stood at N20.12 trillion, slightly higher than N19.44 trillion in the same quarter of 2023.

On the surface, this growth suggests a thriving economy. A growing GDP often means increased production, higher job opportunities and greater consumption of goods and services.

For the government, it did imply higher tax revenues. In August, Wale Edun, Nigeria’s Finance Minister, said that the country had realised revenue totalling N9.1 trillion. This is nearly double what was recorded in the same period in the 2023 fiscal year.

However, that is where the benefits end. For the average Nigerian, these numbers don’t seem to translate into better living standards. This report analyses how a devalued currency and the consequent cost-push inflation are responsible for undermining this GDP growth.

READ MORE: How Cadbury, Nestlé Nigeria Lost N300bn in 9 Months

WHAT DO THE NUMBERS SAY?

In the past year, the naira has experienced a dramatic fall in value due to the adoption of a market-driven exchange rate in 2023. Between September 2023 and September 2024 for instance, the naira dropped by 71.19%, going from N755.27 to N1,601.5 per dollar, according to the Central Bank of Nigeria (CBN).

This is particularly problematic for an import-dependent economy like Nigeria. When a currency devalues, the immediate effect is the hike in the price of imported goods. Businesses also face higher costs for raw materials, foreign debt and customs duties. These increased expenses are often passed on to consumers, pushing up the price of everyday products and driving up the cost of living.

The impact is evident in the data. Inflation for one rose from 26.72% in Q3 2023 to 32.70% in the same quarter of 2024. This means that goods are becoming increasingly unaffordable for many Nigerians.

For instance, the price of beans (1kg) shot up from N790 in October 2023 to N2,798 in October 2024, a 254% increase. Similarly, the cost of eggs (12 pieces) surged from N1,112 to N2,671, marking a 140% rise. The price of boneless beef (1kg) also nearly doubled, increasing from N2,948 to N5,858.

Transportation costs have also followed the same inflationary trend. For example, intercity bus fares increased by 22% year-on-year, rising from N5,885 to N7,188.

Airfares saw an eye-watering 60% increase with a one-way ticket averaging N126,293, up from N78,778 last year. Even okada rides (motorcycle taxis) are not exempt from the price hikes, with fares rising 6%, from N507 to N536.

READ MORE: REPORT: Nigeria Falls Short of Revenue Target, Posts N4.5trn Deficit in Q2

In theory, a growing GDP should lead to improved living standards, more jobs and greater consumption. However, with the naira losing its value and inflation eating into salaries, Nigerians are left to deal with higher prices and lower purchasing power, leaving them to question the true meaning of this economic growth.