A recent report by the National Bureau of Statistics (NBS) has shown that Nigeria achieved a 3.46% GDP growth rate in real terms in the third quarter of 2024, a milestone that the government has praised as proof of economic development. This growth rate surpasses both the second quarter growth of 3.19% in 2024 and the 2.54% growth rate in the third quarter of 2023. However, the reality for millions of Nigerians is different from the celebratory headlines. GDP growth, which is frequently seen as a general indicator of economic performance, does not always correspond to improvements in citizens’ daily lives.
While GDP measures the value of goods and services produced in a country, it does not consider how this wealth is distributed or whether it improves access to basic necessities. This creates an uneven distribution of wealth, where economic progress at the macro level does not trickle down to the majority of citizens. Despite being statistically significant, the 3.46% GDP growth provides little solace to Nigerians who are struggling financially. A higher GDP does not always translate into a higher standard of living because it often reflects expansion in industries that do not directly benefit the people.
Overall condition of the economy is still in dismal.
Gains in sectors like oil and gas, for example, which make up a sizable portion of Nigeria’s GDP, are usually detached from the economic realities faced by average Nigerians. Also, the services sector, which was a key contributor to GDP growth in Q3 2024, does not reflect improvement in the standard of living of the majority of Nigerians or the development of many new jobs. It is noteworthy that the country’s GDP has been recording growth since the beginning of this year. In the first quarter of 2024, Nigeria’s GDP increased by 2.98%, indicating a slight growth in the Economy propelled by important industries including Agriculture and telecommunications.
Also, Q2 2024 saw a GDP rise of 3.19% in, driven by the services sector’s strong performance and substantial economic contribution. Followed by a 3.46% real term GDP growth rate in Q3 2024. While these figures point to economic growth, the overall condition of the economy is still in dismal. A number of underlying factors further highlight how inadequate GDP growth is as a gauge of economic development. Rising living expenses, income stagnation, and persistent rising Inflation have all reduced the potential advantages of these GDP growth.
Economic progress seen as advances to standard of living.
High inflation, for instance, reduces any nominal income growth, making goods and services more and more expensive. Youth Unemployment rates are startlingly high, and unemployment is still a major problem. Even while the GDP increases, millions of Nigerians are still living in Poverty and unable to meet their basic necessities. Deficits in infrastructure, such as unstable power, bad road systems, and inadequate healthcare also restrict economic opportunities and impede advancements in quality of life. Many Nigerians see economic progress as tangible progress to their level of living, such as lower prices for commodities, improved infrastructure, and easier access to basic amenities, rather than in terms of abstract growth indicators.
More significant measures of affluence include having access to affordable healthcare, high-quality education, reliable power, and decent wages. When individuals cannot purchase basic requirements or achieve upward mobility, GDP growth becomes a hollow success. Celebrating GDP growth without taking into account these important metrics shows that the government is out of touch with the problems of its citizens, and runs the risk of deepening public mistrust. The impact of macroeconomic policies on the general public is frequently overlooked by policymakers.
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For citizens, the gap between the positive economic narrative and the harsh realities of daily living, sparks feelings of frustration and seclusion. It is imperative that policymakers understand that GDP growth should be a tool, not the goal in and of itself. The government must reorient its priorities toward measures that support inclusive growth in order to close this disparity. Stabilizing the Naira and tackling inflation are also essential measures for achieving economic stability. Celebrations over GDP numbers will stay distant from the challenges of the average Nigerian unless the government transforms economic progress into real change for its population.