By Abidemi Adebamiwa, Yunus Sirajo Nasir & Dr. Mufutau A. Abdul-Yakeen
Fuel prices in Nigeria are making life tougher for many, especially low-income earners. With a minimum wage of ₦70,000, workers struggle to afford basic needs as fuel prices range between ₦925 and ₦1,065 per liter. Coupled with an exchange rate of ₦1,600 to the dollar, imports become more expensive, impacting everyday essentials. For millions, this means choosing between food, transportation, and other necessities.
A holy text asks, “If your water were to sink into the earth, then who could bring you flowing water?” This illustrates the importance of resource management. Leaders must plan wisely; removing subsidies without preparation only deepens hardship for families. It’s like taking the brakes off a car parked on a steep hill, endangering those inside. Decisions must protect the vulnerable and promote equitable growth.
The issue extends beyond fuel to staples like rice, beans, and garri. In 2015, a 50kg bag of Nigerian rice cost ₦7,000-₦8,000. By December 2024, this same bag costs ₦82,000-₦96,000—an 1,086.67% increase. Imported rice, now at ₦100,000 per bag, has risen 900%. Beans have surged from ₦8,000 to ₦90,000-₦175,000 per 50kg, a shocking 1,556.25% increase. Families are forced to skip meals or cut back on healthcare to survive.
Premium Times reports a small bowl of garri now costs ₦250, while a kilogram of beans has jumped from ₦165 in 2015 to ₦3,500—a 2,000% increase. Meanwhile, wages have grown only fivefold, from ₦18,000 to ₦70,000, while the National Budget skyrocketed from less than ₦4 trillion in 2015 to almost ₦50 trillion in 2024. This stark disparity fuels frustration and widens the economic divide. Families are cutting essential expenses like healthcare and education, exacerbating inequality.
The Dangote and Port Harcourt refineries offer hope. Processing crude oil locally reduces imports, creates jobs, and stabilizes prices. However, as ThisDayLive highlights, local production alone won’t solve Nigeria’s fuel challenges. Reliable census data is critical for equitable resource distribution, yet delays caused by poor planning and political interference undermine this effort. Without accurate population data, policies risk worsening inequality rather than resolving it.
Raising the minimum wage to ₦150,000 per month would ease the burden on low-income workers. With fuel costing ₦995 per liter, someone earning ₦70,000 can barely afford 70 liters monthly—insufficient for commuting. A higher wage would help families meet essential expenses while boosting the economy. Increased spending power strengthens industries, creates jobs, and fosters economic participation.
Through initiatives like the Sustainable Development Initiative (SEDI) at Kwara State University, small-scale interventions can transform communities. In 2017, SEDI implemented a micro-lending model with just ₦500,000, which grew to ₦6 million by 2022. This program prioritized lending to low-income earners, stimulating local economies, and reducing poverty. Additionally, its success inspired similar projects across neighboring states, demonstrating the replicability of such initiatives. Similar initiatives can complement broader reforms, such as subsidy adjustments, to promote equitable growth.
Fuel affordability is tightly linked to wages, making it a critical economic concern for low-income workers. Unlike wealthier nations where higher incomes provide a buffer against rising fuel costs, Nigerian workers face severe limitations. A worker earning ₦70,000 monthly can only afford 3.51 liters of fuel per day’s work, which is insufficient to meet even basic commuting needs. In stark contrast, a California minimum-wage worker earning $16 per hour can buy approximately 17 liters of fuel with just one hour’s pay. This glaring disparity highlights the urgent need to align wages with living costs to improve the quality of life for Nigerian workers.
Addressing these challenges requires a multi-pronged approach that considers both wage increases and fuel price stabilization. Policies aimed at raising the minimum wage to at least ₦150,000 would significantly improve workers’ purchasing power, enabling them to afford essentials like transportation, food, and healthcare. Additionally, targeted subsidies or price controls on fuel could help alleviate immediate financial pressures on households. Comparative studies show that nations with well-structured wage policies and economic interventions are better equipped to handle inflationary shocks. By adopting similar measures, Nigeria can create a more equitable system that prioritizes the needs of its most vulnerable citizens while fostering long-term economic stability.
Fixing these challenges requires raising wages and managing fuel costs strategically. Targeted interventions like micro-lending programs have consistently proven effective in stimulating economic activity and reducing poverty. For instance, studies such as “Modernizability and Formalizability of Rotating Savings and Credit Associations [ROSCAs] through Islamic Banks” highlight how integrating ROSCAs into formal banking systems enhances financial inclusion. Another study, “The Role of Microfinance in Alleviating Poverty in Sub-Saharan Africa,” underscores the transformative potential of small-scale lending in empowering communities and fostering sustainable development. These examples show that leveraging localized, community-driven financial systems can unlock significant economic opportunities for low-income populations.
Moreover, “The Untapped Potential of Women’s Savings Groups in Rural Nigeria” illustrates how women-led financial groups contribute to economic resilience, especially during inflationary periods. Coupled with broader reforms, such initiatives can amplify their impact by addressing structural challenges such as wage stagnation and fuel affordability. Localized solutions—whether through formalized ROSCAs or targeted microfinance—work best when aligned with national policies aimed at raising living standards. By strategically combining grassroots financial empowerment with macroeconomic reforms, Nigeria can effectively tackle its economic disparities and create a more equitable future for all citizens.
The active Dangote and Port Harcourt refineries, when coupled with fair wage policies and transparent pricing frameworks, hold transformative potential for Nigeria’s energy sector. By processing crude oil locally, the country can significantly reduce its reliance on costly imports, thereby mitigating foreign exchange risks and stabilizing fuel prices. This shift not only creates jobs but also strengthens local industries, providing an economic boost that ripples across various sectors. Scholars like Omotosho, in their article “Oil Price Shocks, Fuel Subsidies, and Macroeconomic (In)stability in Nigeria,” emphasize that a strong domestic refining infrastructure is essential for shielding the nation from external economic shocks. Integrating these refineries with broader reforms can amplify their impact, ensuring energy security and economic stability.
Furthermore, studies such as “The Economic Impact of Local Refining Capacity on Fuel Subsidy Removal” highlight the importance of coupling refinery expansion with targeted social programs to ease the transition for vulnerable populations. By adopting a holistic approach that combines refining capacity, transparent pricing, and wage adjustments, Nigeria can address immediate economic challenges while fostering long-term growth. This dual strategy is essential for building resilience and ensuring equitable distribution of benefits. Such reforms, when paired with reliable census data and inclusive policy frameworks, provide a roadmap for sustainable development that prioritizes the well-being of all citizens.
President Tinubu’s efforts to grant local governments financial autonomy are commendable and signify a crucial step toward decentralizing governance. However, these efforts face significant challenges due to the absence of reliable census data, which is vital for accurately prioritizing development needs and ensuring equitable resource distribution. Without these figures, local governments may struggle to allocate resources effectively, leaving many communities underserved and exacerbating regional disparities. Such inefficiencies undermine broader governance reforms, potentially creating a cycle of ineffective service delivery and increased public dissatisfaction.
Accurate population data is not merely a technical requirement; it serves as the backbone of effective policy-making and equitable development. Delays in census activities caused by funding shortages, political interference, and poor planning further hinder progress. These gaps affect everything from resource allocation to infrastructure planning, making it harder for local governments to meet their communities’ needs. By addressing these issues and prioritizing reliable census data, Nigeria can create a governance framework that fosters inclusivity and ensures that all regions benefit from national development efforts.
To answer the earlier question—“If He withholds the water, who then can supply you with flowing water?”—another holy text reminds us, “The Earth is the Lord’s, and everything in it.” Leaders carry the profound responsibility of treating their citizens with care and ensuring policies promote fairness and stability. A carefully planned approach, informed by data and grounded in equity, is essential for building resilience and fostering a just society.
Reforms must not only alleviate immediate hardship but also pave the way for long-term stability and growth. Policies should include safety nets like targeted subsidies or gradual transitions to shield the poor from abrupt economic shocks. Effective reforms prioritize fairness, ensuring no group bears an undue burden. By fostering inclusivity and accountability, leaders can rebuild trust and create a sustainable economic framework. With thoughtful action, Nigeria can address current challenges while laying the groundwork for a fairer, more resilient future.
- Abidemi Adebamiwa is a geopolitical analyst and Ph.D. student with expertise in finance, policy, and African development.
- Yunus Sirajo Nasir is a seasoned economist specializing in energy economics and national development.
- Dr. Mufutau A. Abdul-Yakeen is an expert in Islamic Economics, teaching at Muhammad Kamalud-deen University and Summit University of Nigeria, and founder of Al-huliyaa Instructional Services
