Nigeria’s poverty rate climbed to 63 per cent not because inflation remains high alone, but largely due to the immediate impact of sweeping economic reforms that reduced household purchasing power, a World Bank-backed report has revealed.
According to the report, the sharp increase in poverty followed the Federal Government’s removal of petrol subsidy and other fiscal adjustments, which triggered a surge in the cost of living across the country.
These reforms, while aimed at stabilising the economy, significantly raised transport fares, food prices, and energy costs, pushing millions of Nigerians into poverty.
The findings show that before the reforms, about 49.8 per cent of Nigerians were classified as poor.
However, once subsidy removal and related policy changes took effect, the poverty rate jumped to approximately 63 per cent, reflecting the immediate shock experienced by households.
A key driver of the increase was the erosion of real incomes.
Although inflation has recently begun to ease, it had already spiked sharply following the reforms, meaning wages and earnings could no longer keep up with rising prices.
As a result, many households were forced to cut back on basic consumption, worsening living conditions.
The report also highlighted that limited social safety nets contributed to the surge in poverty.
While government cash transfer programmes and other interventions provided some relief, they were not sufficient to fully offset the widespread impact of higher living costs.
Poverty levels only declined slightly after these measures were introduced.
In addition, structural challenges such as unemployment, underemployment, and low productivity further deepened the situation.
Many Nigerians, particularly those in the informal sector, were left without stable income sources to absorb the economic shocks.
Experts noted that the combination of subsidy removal, energy price adjustments, and currency pressures created a ripple effect throughout the economy, disproportionately affecting low-income households.
Despite recent signs of easing inflation, the World Bank stressed that poverty remains elevated because the underlying damage to household incomes has not yet been reversed.
Without strong income growth, job creation, and expanded social protection, millions of Nigerians may continue to struggle.
The report concluded that while the reforms may yield long-term economic benefits, their short-term impact has been a significant rise in poverty, underscoring the need for policies that directly support vulnerable populations.
Why Nigeria’s poverty rate rose to 63% despite easing inflation — World Bank
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