The World Bank has raised concerns that more Nigerians are likely to fall into poverty by 2027, despite projections of economic growth. This warning stems from a combination of factors that continue to undermine the country’s poverty reduction efforts.
Rising Poverty Amid Economic Growth
While the World Bank projects Nigeria’s economy to grow by 3.6% in 2025, this growth has not translated into significant poverty alleviation. In 2023, approximately 49% of Nigerians—about 109 million people—were living in poverty, with an additional 47 million considered economically insecure and at high risk of falling into poverty. The World Bank notes that Nigeria now accounts for 15% of the world’s extremely poor population.
Contributing Factors to Increasing Poverty
Several key issues contribute to the anticipated rise in poverty:
High Inflation: Persistent inflation, particularly in food prices, has eroded the purchasing power of many Nigerians, making basic necessities less affordable.
Fuel Subsidy Removal: The elimination of fuel subsidies has led to increased transportation and energy costs, disproportionately affecting low-income households.
Limited Social Safety Nets: Nigeria’s social protection programs have limited coverage. In 2023, only 17% of households were covered by any safety net program, and less than 1% received cash transfers
Labor Market Challenges: The labor market is characterized by a high prevalence of informal employment, with limited opportunities for formal wage jobs, especially for women and youth.
Regional Disparities
Poverty in Nigeria is not evenly distributed. The northern regions, particularly states like Sokoto, Bayelsa, and Gombe, have higher poverty rates compared to southern states such as Lagos and Ondo. Approximately 65% of the poor population resides in the North, highlighting significant regional disparities.
Recommendations for Addressing Poverty
To mitigate the rising poverty levels, the World Bank suggests:
Enhancing Social Protection: Expanding the coverage and effectiveness of social safety net programs to reach more vulnerable populations.
Investing in Human Capital: Improving access to quality education and healthcare to build a more skilled and healthy workforce.
Supporting Small Enterprises: Providing support to small-scale farm and non-farm enterprises through access to finance, inputs, and markets.
Labor Market Reforms: Implementing policies that promote job creation, particularly for women and youth, to enhance employment opportunities.
Despite projected economic growth, Nigeria faces significant challenges in reducing poverty. Addressing these issues requires comprehensive policy reforms focused on social protection, human capital development, and labor market improvements to ensure inclusive and sustainable economic growth.
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Written By Fortune Davidson