The World Bank has revealed that about 139 million Nigerians are currently living in poverty, despite early signs of economic stabilization driven by key government reforms.
The disclosure was contained in the Bank’s latest Nigeria Development Update (NDU) report, titled “From Policy to People: Bringing the Reform Gains Home,” released on Wednesday in Abuja.
According to the report, while reforms such as fuel subsidy removal, exchange rate unification, and fiscal restructuring have helped stabilize Nigeria’s macroeconomic environment, their impact on citizens’ welfare remains limited due to persistent inflation—especially soaring food prices.
The Bank noted that poverty in Nigeria began to rise in 2019 following a combination of policy missteps and external shocks such as the COVID-19 pandemic, and has continued to worsen despite recent reform efforts.
Speaking at the launch, Dr. Matthew Verghis, World Bank Country Director for Nigeria, said key economic indicators were showing positive momentum, citing improvements in revenue generation, debt management, foreign reserves, and exchange rate stability.
“Growth has picked up, revenues are rising, debt indicators are improving, the exchange rate is stabilizing, and inflation is beginning to ease,” Verghis said. “These are significant achievements many countries would envy. However, despite these gains, many Nigerians are still struggling with eroded purchasing power.”
He emphasized that 139 million Nigerians are living in poverty in 2025, warning that high inflation—particularly food inflation—continues to erode household welfare and could weaken public support for ongoing reforms.
“Food inflation affects everyone, particularly the poor,” he said. “While tight monetary and fiscal policies are appropriate, they are not enough. Structural measures are needed to lower food prices and ensure stability benefits ordinary Nigerians.”
Presenting the report’s findings, Samer Matta, the Bank’s Acting Lead Economist for Nigeria, noted that fiscal indicators have begun to improve. Government revenues, he said, have risen from 3.5% of GDP in 2024 to 3.9% in 2025, while capital expenditure by state governments increased from 1% of GDP in 2022 to 2.7% in 2025, accounting for about 60–65% of subnational spending.
The report projected GDP growth to rise to 4.4% by 2027, supported by stronger agriculture, services, and industrial sectors. Inflation is expected to ease to 15.8% by 2027, aided by tight monetary policy and improved supply conditions.
Nigeria’s fiscal deficit is projected to narrow to 2.7% of GDP between 2026 and 2027, compared to an average of 4.4% from 2021 to 2023, reflecting higher tax revenues and reduced interest payments. The report also noted that foreign reserves have grown to $42.5 billion, and the exchange rate market is showing greater stability.
However, the Bank warned that Nigeria’s economic outlook remains exposed to risks such as volatile oil prices, reform fatigue, political uncertainty ahead of elections, and climate-related challenges.
Matta also criticized excessive administrative deductions by revenue-collecting agencies, saying such practices yield little developmental impact. He added that wages and salaries consume about 70% of federal spending, leaving limited fiscal space for capital projects.
On the issue of food inflation, Matta attributed part of the problem to restrictive trade policies and weak incentives for local production.
“The ban on certain food items and inadequate production incentives have constrained supply, pushing prices higher,” he explained. “Our analysis shows that reforming these policies could reduce poverty by about 1.06%, lifting 1.3 million households out of poverty.”
The World Bank concluded that while Nigeria’s reforms have succeeded in restoring macroeconomic stability, their benefits are yet to reach most citizens. It urged the government to take decisive steps to curb inflation, improve spending efficiency, and expand social protection programs to cushion vulnerable populations.
