Comercio Partners has released a comprehensive report analyzing the past 10 years of Nigeria's money market and the corresponding changes in living costs. The report, titled 'A Decade of Money Market and Living Costs,' provides deep insights into how monetary policies, inflation, and market dynamics have shaped the financial landscape and affected the average Nigerian.
Key Findings on Money Market Trends
According to the report, the money market has experienced significant volatility over the last decade. The average yield on Treasury bills fluctuated between 10% and 18%, peaking in 2022 due to tight monetary policy aimed at curbing inflation. The report notes that the Central Bank of Nigeria's (CBN) Open Market Operations (OMO) played a crucial role in managing liquidity, with OMO rates averaging 12.5% over the period.
Comercio Partners' analysts highlight that the money market has become increasingly attractive to foreign investors, with foreign portfolio inflows growing by 40% year-on-year in 2025. However, this also exposed the market to external shocks, as seen in 2023 when outflows spiked following global interest rate hikes.
Living Costs on the Rise
The report also sheds light on the sharp increase in living costs. The Consumer Price Index (CPI) has risen by an average of 14.3% annually over the decade, with food inflation outpacing overall inflation. The cost of staple foods like rice, beans, and tomatoes has more than doubled since 2016, according to data from the National Bureau of Statistics (NBS).
Housing costs have also surged, with rent in major cities like Lagos and Abuja increasing by 150% over the period. The report attributes this to rapid urbanization and a shortage of affordable housing. Transportation costs have similarly risen, driven by fuel price hikes and poor infrastructure.
Impact on Households
The combination of stagnant wages and rising living costs has squeezed household budgets. The report estimates that the average Nigerian household now spends 65% of its income on food and housing, up from 50% a decade ago. This has led to a decline in discretionary spending and savings.
Comercio Partners' Chief Economist, Dr. Adebayo Ogunleye, stated: 'The past 10 years have been challenging for Nigerian households. While the money market has offered opportunities for investors, the average citizen has felt the pinch of rising living costs. Policymakers must prioritize measures to boost productivity and control inflation.'
Policy Recommendations
The report concludes with several recommendations. It urges the CBN to maintain a balanced approach to monetary policy, avoiding excessive tightening that could stifle growth. It also calls for increased investment in agriculture to reduce food imports and stabilize prices. Additionally, the report advocates for better urban planning and housing policies to address the housing deficit.
Comercio Partners emphasizes the need for financial inclusion, noting that only 40% of Nigerians have access to formal financial services. Expanding access could help households better manage their finances and invest in income-generating activities.
Outlook for the Next Decade
Looking ahead, the report projects that money market yields will remain elevated in the near term due to persistent inflation. However, living costs are expected to moderate if the government implements structural reforms. The report highlights the potential of digital finance and fintech to drive financial inclusion and reduce transaction costs.
Comercio Partners remains optimistic about Nigeria's long-term economic prospects but warns that without decisive action, the gap between the rich and poor may widen further. The full report is available on the company's website.
