Policy missteps, global shocks trap millions of Nigerians in poverty— World Bank

…says over 70% of Nigerians remain poor despite reforms

The World Bank has decried that Nigeria’s economic performance over the past years has been constrained by structural rigidities, policy missteps and repeated external shocks, leaving millions trapped in poverty.

The bank, in its Country Partnership Framework for Nigeria, covering 2026 to 2032, stated that about 139 million Nigerians currently live below the national poverty line, with poverty concentrated largely in the northern part of the country.

It also indicated that more than 86 million Nigerians are living in the dark, without access to electricity. At the same time, three to four million young people enter the labour market every year with limited employment opportunities.

“Despite recent bold reforms stabilising the economy and laying the groundwork for the Renewed Hope Agenda, significant structural challenges remain,” the bank stated.

It emphasised the need for the Nigerian government to sustain macro-fiscal and structural reforms to reduce inflation, expand fiscal space, and ensure that recent economic stabilisation translates into better livelihoods for Nigerians.

The reports reviewed reforms introduced by the Bola Tinubu administration, including the removal of the petrol subsidy, exchange rate liberalisation, tighter monetary policy and tax reforms.

The Bank noted that while the several reforms, including the removal of petrol subsidy, exchange rate liberalisation, tighter monetary policy and tax reforms – introduced by the President Tinubu-led administration have impacted the macroeconomic indicators, they were yet to translate into improved livelihoods for Nigerians.

“Following a change in administration in May 2023, the country has been pursuing bold reforms that lay the groundwork to reestablish macroeconomic conditions for growth and poverty reduction.

“These include the removal of the costly oil subsidy to correct fiscal imbalances, unifying and liberalizing the exchange rate, and establishing a rules-based monetary policy regime supported by the authorities’ commitment to end deficit monetization. Though these measures are helping Nigeria’s economy turn the corner, with GDP growth reaching 4.1 percent in 2024, inflation remains high, increasing hardship and poverty,” the report stated.

The bank noted that even though it had supported a national cash transfer program designed to protect the poor and vulnerable from these shocks, the rollout has been slower than anticipated.

The Country Diagnostic document alao added that “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”

Read also: World Bank says over 70% of Nigerians remain poor despite reforms

Noting that one in four Nigerian youths is neither employed, in education, nor in training, while the majority of workers remain trapped in low-productivity, low-paying informal jobs, the bank said that reforms alone would not significantly reduce poverty unless they generate jobs on a large scale.

It projected that about 60 million young Nigerians would enter the labour force over the next decade, making employment generation Nigeria’s most urgent development priority.

The World Bank also raised concerns over the country’s limited social protection coverage. According to the report, more than three out of every five Nigerians are poor, while over 60 million people are classified as ultra-poor and unable to meet minimum food requirements.

It noted that public spending on social protection represented just 0.14 per cent of Gross Domestic Product in 2021 and that only 8.5 per cent of poor Nigerians were covered by any form of social safety net. The report stated that as ongoing reforms expand fiscal space, directing more resources towards the ultra-poor would be critical to strengthening social resilience.

The bank is however looking to support Nigeria in building a unified, better-targeted and domestically financed social protection system. Drawing lessons from Brazil, Pakistan, Indonesia and India, the framework proposes differentiated support for the ultra-poor, poor and near-poor, alongside expansion of the national social social registry, digital identity system and digital payment infrastructure.

According to Bank said the strategy also seeks stronger domestic financing, improved coordination between federal and state governments, and closer integration of cash transfers with investments in nutrition, education, healthcare, and sanitation. It added that the interventions are expected to expand social protection coverage to about 41 million beneficiaries.