Inflation, weak naira may push 13m Nigerians into poverty – PwC

At least 13 million Nigerians will be plunged into poverty in 2025 due to high inflation, rising interest rates and naira weakness, PwC has projected in a report.

The report, titled ‘2025 budget and economic outlook’ published by PwC Nigeria revealed that the poverty rate in Africa’s most populous nation is estimated to rise from 41.4 percent of the population in 2023 to 47.2 percent in 2024.

“Macroeconomic pressure points such as rising inflation, interest rate and naira depreciation may drive an additional 13 million people below the national poverty line in 2025,” PwC said.

The World Bank classifies anyone living on less than $2.15 a day as living in extreme poverty, a condition that is now prevalent in the country.

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Nigeria has been contending with triple whammy of sky-high inflation which has seen benchmark interest rate increase to a record high.

The West African nation is also grappling with a weakening naira that shed about 41 percent of its value last year.

The combination of these three factors meant a hard time for a nation that’s reeling from its worst cost-of-living crisis in a generation.

Macroeconomic challenges confronting Nigeria stems from the twin policies implemented by the President Bola Tinubu administration in mid-2023.

The policies have stoked inflation and worsened living conditions. It has equally left many Nigerians so poor that they struggle to eat three meals a day.

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Almost two-thirds of households report being unable to eat “healthy, nutritious or preferred foods” in the past month, according to a report by the Abuja-based NBS — up almost 80 percent compared with five years ago.

But the narrative is expected to change this year as there is more incentive in agriculture, although productivity to match the country’s booming population poses a dire challenge.

“The number of people living below the
national poverty line is projected to increase by about 13 million by 2025,” the report indicated.

This is as the World Bank puts the number at 129 million in 2024 for a country that’s a population that’s little above 220 million.

But with the federal government targeting a 15 percent inflation rate this year, analysts say if the projections are actualised, poverty levels may dwindle while living conditions will improve.