While inflation has declined, it remains high and does not impact all citizens equally. Those with fixed incomes, such as minimum wage earners or public servants, see their purchasing power erode rapidly. Meanwhile, individuals or businesses with access to capital or assets that appreciate during inflationary periods, such as real estate or foreign currency holdings, are better positioned to protect and even increase their wealth. This dynamic deepens inequality, making the economically vulnerable even more precarious while further enriching the elite. 

In Nigeria, where regulatory oversight is weak, inflation and austerity create conditions for exploitative business practices. Price gouging, where businesses inflate prices beyond reasonable costs, thrives in times of economic uncertainty. Traders and suppliers often pre-emptively raise prices, citing ‘anticipated’ inflation. For example, in February 2024, the Federal Competition and Consumer Protection Commission shut down Sahad Stores in Abuja for charging customers more than the shelf prices. 

Similarly, hoarding is widespread. In February 2024, the Kano State Public Complaints and Anti-Corruption Commission uncovered multiple warehouses stockpiling food to create artificial scarcity. While hoarders profit from rising prices, ordinary Nigerians struggle to afford essentials. Such rent-seeking behaviours worsen inflation, while austerity measures limit the government’s ability to intervene. 

Currency devaluation has also become a tool for wealth accumulation. As the naira weakens, those with foreign currency reserves exchange dollars or euros at increasingly favourable rates. When Nigeria removed currency controls in 2023, the naira plummeted, and dollar holders made windfall gains by selling at far higher rates. Meanwhile, salaried workers saw their earnings shrink in real terms as inflation surged. 

Nowhere is this dynamic clearer than in real estate, where inflation and austerity intersect. Wealthy individuals and corporations buy up property, knowing that real estate appreciates during inflationary periods. This speculation drives up housing prices, making affordable accommodation increasingly out of reach for ordinary Nigerians. Despite this, government officials, such as Federal Capital Territory minister, Nyesom Wike, attribute rising housing costs solely to market forces, ignoring the role of speculative investment and economic manipulation. 

Furthermore, the lack of robust regulatory frameworks not only allows predatory business practices but also incentivizes them (similar to real estate, where speculation and foreign currency hedging drive up housing costs beyond what ordinary Nigerians can afford). Corruption within regulatory bodies often means that perpetrators face minimal consequences and businesses exploit these conditions to maximize profits. This interaction between economic policy and systemic corruption makes it difficult for austerity measures to achieve their intended effects, as any potential benefits are undermined by exploitative practices that flourish unchecked. 

The beneficiaries of this system are often those with the means to navigate and manipulate the economic landscape. Large businesses, wealthy individuals and even foreign investors can use inflation as a means to increase profit margins, while austerity reduces the government’s capacity to intervene through subsidies, welfare programmes or market regulations. The result is a system where those who already possess wealth and power accumulate more, while those who lack face increasingly dire circumstances.  

The widening gap manifests in social consequences that are visible throughout the country. The rise of informal economies, such as the surge in sex work I described earlier, is a symptom of a society where legal and secure means of earning a living have become inaccessible for many. Note: although researchers and NGO reports have associated poverty with a rise in sex work, there is little quantitative data to affirm their claims due to the informal and often hidden nature of the industry. However, multiple studies do suggest that more women, particularly young and unemployed, have turned to sex work as a survival strategy. Niyi Jacob, in his 2019 study, ‘Poverty and Women Prostitution in Nigeria: A Study of Refugees and Displaced Women in Benin City’, highlights how economic hardship has pushed many women into sex work as a means of survival. 

Interviews ​​conducted by Ibukunoluwa Bose Olojede, Victor Ajulor Omoniyi, and Busayo Qazeem Ibikunle in their 2020 study, ‘Poverty and Sex Trade in Nigeria: Implications on Women’s Sexual Health’, indicate that worsening economic conditions, including rising unemployment, subsidy removals and inflation, have pushed more people into the trade. The study involved in-depth qualitative interviews with sex workers across multiple Nigerian cities, highlighting the economic desperation that drives many into the trade as a survival strategy. The authors note that many women enter the industry not out of choice but as a last resort to sustain themselves and their families. Reports from advocacy groups further this argument, with organizations like the Nigeria Sex Workers Association (Precious Jewels) documenting an increase in membership and demand for support services. 

These trends reflect a broader reality: when a stable means of earning a living becomes inaccessible, people are forced into precarious alternatives. Youth unemployment and underemployment, compounded by the high cost of living, pushes individuals toward informal economies where exploitation is rife. As more people find themselves trapped in cycles of survival-driven labour, including sex work, the social fabric begins to fray, increasing the likelihood of deeper societal unrest. 

While austerity policies may bring fiscal discipline and international approval, they come at a steep cost for ordinary Nigerians. Inflation, when unchecked or exploited, further entrenches inequality, turning economic policy into a lived reality of struggle. The question is not just whether austerity can stabilize Nigeria’s economy but whether it can do so without deepening poverty and undermining social welfare. Without a human-centred approach, policies designed to ‘balance the books’ risk pushing the majority further into hardship while a privileged few continue to profit from the conditions that impoverish others.