A comprehensive report by Commercio Partners has documented a decade of transformation in Nigeria's money market and living costs, showing that while the money market expanded by 150% between 2016 and 2026, the cost of living surged by 200%, far outstripping average income growth of only 80%. The report, titled 'A Decade of Economic Shifts: Money Market and Living Costs in Nigeria (2016-2026),' highlights the widening gap between financial sector growth and household purchasing power.
Money Market Growth and Inflationary Pressures
The report draws on data from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS). It notes that the money market's expansion was driven by increased government borrowing, higher treasury bill yields, and a surge in foreign portfolio investments. However, inflation averaged 15.4% over the decade, peaking at 24.1% in 2024 before moderating to 18.7% in 2026. According to Commercio Partners, 'The money market has become a haven for investors seeking high returns, but this has not translated into improved living standards for the average Nigerian.'
Living Costs Outpace Income Growth
The cost of basic necessities—food, housing, transportation, and healthcare—rose sharply. Food prices increased by 180%, with staples like rice and beans seeing a 210% hike. Housing costs in urban areas climbed 170%, while transportation costs rose 190% due to fuel price deregulation. Meanwhile, minimum wage increased only from ₦18,000 in 2016 to ₦70,000 in 2026, a 289% nominal rise but a real-terms decline when adjusted for inflation. The report states that 'the purchasing power of the average Nigerian has eroded by approximately 35% over the decade.'
Impact on Households and Inequality
The disparity between money market returns and living costs has exacerbated inequality. The top 10% of income earners, who are more likely to invest in the money market, saw their real incomes grow by 25%, while the bottom 40% experienced a 15% decline. 'This divergence is unsustainable,' the report warns, 'and calls for policies that link financial sector growth to inclusive economic development.'
Policy Recommendations
Commercio Partners recommends several measures: increasing agricultural productivity to curb food inflation, expanding social safety nets, and promoting financial literacy to broaden money market participation. The report also urges the CBN to consider inflation-indexed bonds to protect savers' purchasing power. 'Without deliberate intervention, the gap between the money market and living costs will continue to widen, threatening social stability,' the report concludes.
