Nigeria has entered 2026 and many families are still feeling the stress of high expenses.
While headline inflation eased to around 14.45% in late 2025, due to better harvests and a more stable naira, the cost of everyday essentials remains high.
Analysts in the industry say the present economic reforms have brought some stability, but challenges like insecurity, climate change impacts, and increasing urban demands keep prices of essential products high.
In this article, we will examine four key areas where the cost of living pressures are likely to continue or intensify in 2026.
1. Food Prices and Household Nutrition
Food is one of the biggest burdens for most Nigerian families. Even though food inflation dropped to about 11% around November 2025, staples like rice, garri, beans, bread, and cooking oil are still too expensive compared to a few years ago.
For instance, market surveys in Lagos showed a 50kg bag of white garri rising 25% month-on-month in December 2025 due to the very high festive demand.
There are several factors driving these increasing costs. The most important of these factors is insecurity in the northern farming regions that disrupts food supply chains, while climate problems, such as floods and droughts, affect harvests.
Most traders complain that the price inflation is due to an unreliable supply of raw food products from core farming regions in Nigeria. Another important problem that adds to the challenge of insecurity is poor logistics and high transport fees.
As a result of this, many households are changing their eating habits to fit the food supply and affordability conditions. Skipping meals, reducing portions, or switching to cheaper, less nutritious options is now the reality of millions of Nigerians as a result.
Projections from the World Food Program warned that up to 33 million Nigerians could face very high food insecurity and inflation in 2025-2026 if these trends continue, particularly in the northeastern region of Nigeria.
2. Energy Costs: Fuel, Electricity, and Daily Survival
In economics, energy is a key factor that influences the cost of living directly and indirectly, and increasing energy expenses are expected to add more pressure on the cost of living in 2026.
The full removal of petrol subsidies a few years ago led to volatile prices, with ripple effects on transport and goods.
Just after the removal of the petrol subsidies in 2023, the overall national consumption reduced by over 19.2 litres, indicating a sharp drop in demand due to the higher cost.
In 2025, petrol costs also fluctuated, peaking earlier in the year and reducing national consumption, and a new 5% surcharge on fuel is set to begin in January 2026, potentially adding more pressure.
Increasing electricity costs also add to the challenge. Band A customers who were promised 20+ hours of power supply faced tariffs around N206-225 per kWh in late 2025, far higher than lower bands.
Many people now rely on generators for power supply, further increasing spending on diesel and gas.
For average families, these costs mean tough choices, powering only essential appliances in their homes or reducing spending on other needs. As domestic crude oil refining increases, we expect some relief, but volatility still remains a risk in 2026.
3. Housing, Rent, and Urban Living Pressures
Because of the increase in rural-urban migration in Nigeria, big cities like Lagos, Abuja, and Port Harcourt are facing an increase in housing costs but supply lags, pushing annual rent increases to 10-30% in many areas.
A decent apartment in prime locations can now cost millions of naira yearly, including service charges and maintenance fees. These changes are not unconnected to the high inflation rate Nigeria has been experiencing for some years now.
The high inflation rate and increased Monetary Policy Rate mean a higher cost of building materials and labour translating into a higher cost of house rent.
This affordability gap affects middle – and low-income earners most. Many spend over half of their income on rent, leaving little for food or education. In Lagos, limited land and high building material costs exacerbate the issue, while Abuja’s planned layout comes with high prices.
Without major new housing initiatives in 2026, housing pressure is set to continue squeezing urban families, further increasing the cost of living.
4. Transportation, Healthcare, and Everyday Services
Daily commuting and essential services like healthcare round out the key pressures on the cost of living. Transport fares in Nigeria rose sharply with fuel costs, making trips to work or the market more expensive. In 2025, many students and workers struggled with these price hikes.
Healthcare is another concern because costs for drugs and consultations remain high, especially with foreign-made medicine.
Education fees in private schools jumped due to higher operational costs, forcing some parents to switch to public options.
While both private and public school operators face more inflation pressures that affect the cost of operation and quality of service, parents are unsettled by the added cost which could be as much as 100%, depending on the school of choice.
Conclusion
While the Central Bank of Nigeria projected economic growth of up to 4.5% in 2026 with easing inflation, these cost pressures highlight the need for more targeted support.
Better security, climate-resilient farming, and more affordable housing could ease the burden. For now, many Nigerians will need resilience and smart budgeting to navigate through the present conditions.
