‎Why Nigeria’s poverty rate rose to 63% despite easing inflation — World Bank ‎

‎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.
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‎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.
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‎These reforms, while aimed at stabilising the economy, significantly raised transport fares, food prices, and energy costs, pushing millions of Nigerians into poverty.
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‎The findings show that before the reforms, about 49.8 per cent of Nigerians were classified as poor.
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‎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.
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‎A key driver of the increase was the erosion of real incomes.
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‎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.
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‎As a result, many households were forced to cut back on basic consumption, worsening living conditions.
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‎The report also highlighted that limited social safety nets contributed to the surge in poverty.
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‎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.
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‎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.
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‎Many Nigerians, particularly those in the informal sector, were left without stable income sources to absorb the economic shocks.
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‎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.
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‎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.
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‎Without strong income growth, job creation, and expanded social protection, millions of Nigerians may continue to struggle.
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‎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.