Nigeria’s Economic Recovery Yet to Reach Households, AERE Tells Tinubu
Economic recovery faces an affordability test
Nigeria’s stronger revenue performance and improving macroeconomic indicators have yet to translate into significant relief for households, according to the Alliance for Economic Research and Ethics (AERE).
The group has called on President Bola Tinubu’s administration to ensure that the benefits of economic reforms reach households through improved purchasing power, lower living costs, stronger incomes and greater access to affordable housing and credit.
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Revenue gains have strengthened government finances
AERE acknowledged the progress made in revenue mobilisation under the Tinubu administration, particularly the increase in tax collections.
The group said Nigeria Revenue Service collections rose from N12.3 trillion in 2023 to N27.1 trillion by July 2026, giving government greater fiscal capacity to fund public programmes and infrastructure.
However, AERE argued that stronger government revenue should ultimately produce measurable improvements in household welfare.
The group said economic recovery should not be assessed only through government revenue, foreign exchange stability or financial-market performance, but also by whether households can afford basic necessities.
Housing affordability remains a major concern
The disconnect between economic indicators and household welfare has significant implications for Nigeria’s housing market.
Rising rents, property prices, construction costs and utility expenses continue to place pressure on household budgets. Even where inflationary pressures begin to ease, housing affordability may remain weak if incomes fail to increase sufficiently.
For many households, the challenge is no longer simply finding a home but finding accommodation that can be sustained within existing income levels.
This is particularly important in major urban markets such as Lagos, Abuja and Port Harcourt, where rents and property prices have risen sharply in recent years.
Higher incomes needed to support housing demand
A sustainable recovery in the housing market ultimately depends on household purchasing power.
When income growth lags behind rent and property-price increases, households are forced to downgrade accommodation, move further away from employment centres or allocate a larger proportion of their earnings to housing.
That dynamic can weaken effective demand for formal housing even when the overall need for housing remains extremely high.
For developers, the challenge is equally significant. Construction costs remain elevated, but increasing prices to recover those costs can reduce the number of households able to afford completed homes.
Mortgage access remains a critical gap
Affordable mortgage finance will also be necessary if economic recovery is to translate into increased home ownership.
High interest rates and limited long-term mortgage funding continue to make conventional home loans inaccessible to a large proportion of Nigerian households.
Recent initiatives to expand mortgage access, including new financing products for Nigerians in the diaspora, demonstrate the potential for broader housing finance. However, the domestic market still requires more affordable and longer-term funding for low- and middle-income households.
A stronger economy should therefore be accompanied by policies that improve access to mortgages while reducing the cost of housing finance.
Government revenue can support housing infrastructure
The increase in government revenue also creates an opportunity to address infrastructure constraints that contribute to housing costs.
Investment in roads, public transport, drainage, water supply and electricity can make new areas more viable for housing development.
Better infrastructure can also reduce the additional costs households face when living in poorly serviced communities.
For developers, infrastructure investment can open up new locations and reduce the need to provide expensive private infrastructure within housing estates.
The risk of a widening affordability gap
A major concern is that improvements in the broader economy could benefit investors and asset owners faster than ordinary households.
Property owners may benefit from rising asset values and rental income, while households dependent on salaries or small-business earnings struggle to keep pace with housing costs.
This could create a two-speed property market in which real estate remains attractive as an investment while becoming increasingly difficult to access as a home.
Addressing this gap will require housing policies that focus not only on increasing supply but also on ensuring that new homes match the purchasing power of intended buyers and tenants.
Economic recovery must support housing supply
The housing sector also needs stronger support on the supply side.
High land costs, expensive building materials, infrastructure deficits, financing costs and regulatory delays all contribute to the final price of housing.
If government revenue growth is channelled into infrastructure, land administration, housing finance and development incentives, it could help reduce some of these structural costs.
This would make it easier for private developers and institutional investors to deliver housing at more accessible price points.
Outlook
Nigeria’s stronger revenue performance gives government greater capacity to invest in infrastructure and social services, but AERE’s concerns highlight an important test for the country’s economic recovery: whether improved government finances eventually translate into stronger household purchasing power.
For the housing market, the key indicators will be income growth, rent affordability, mortgage access, construction costs and infrastructure delivery.
If economic reforms eventually improve household incomes while reducing the cost of financing and developing housing, Nigeria could see stronger and more sustainable housing demand. Without that transition, macroeconomic recovery could continue alongside significant affordability pressures for households.
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