Economy News Correspondent
Ruth Ogbechie
Nigeria’s poverty level has climbed to 63% in 2025, even as inflation shows a significant decline, according to a new report released by the World Bank.
The findings were contained in the bank’s Nigeria Development Update (April 2026) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” presented in Abuja on Tuesday.
The report revealed a steady worsening of poverty over the past three years, rising from 56% in 2023, to 61% in 2024, and further to 63% in 2025—a figure estimated to represent about 140 million Nigerians living below the poverty line.
Inflation Eases, But Poverty Deepens
Despite a sharp moderation in inflation, the World Bank said the improvement has not translated into better living conditions for most citizens.
According to data from the National Bureau of Statistics, headline inflation dropped from 34.80% in December 2024 to 15.15% in December 2025, while food inflation also fell from 39.84% to 10.84% within the same period.
However, the World Bank noted that the cost of living remains high enough to continue eroding real incomes.
“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.
Structural Challenges Driving Poverty
The report attributed Nigeria’s rising poverty levels to deeper structural weaknesses in the economy rather than inflation alone.
It explained that economic growth has been driven mainly by the services and industrial sectors, while agriculture—where more than half of poor Nigerians are employed—has lagged behind.
This imbalance, the bank said, has limited income growth for vulnerable households and slowed the transmission of economic growth into improved welfare.
The report also highlighted the lingering impact of earlier inflation spikes, which weakened purchasing power before recent price stabilisation.
External Pressures Add to Hardship
Global shocks, including ongoing geopolitical tensions in the Middle East, were also cited as contributing factors to rising costs of food, energy, and transportation—further worsening conditions for low-income households.
Gradual Improvement Expected, But Risks Remain
Looking ahead, the World Bank projected a gradual decline in poverty starting from 2026, as inflation continues to ease and macroeconomic conditions stabilise.
Poverty is expected to fall to about 59% by 2028, supported by improved price stability and modest economic growth.
However, the bank warned that progress will remain slow unless Nigeria addresses weak job creation, low agricultural productivity, and rising inequality.
Focus on Human Capital Development
The report also linked poverty to broader human capital challenges, noting that poorer households suffer worse outcomes in nutrition, healthcare, and early childhood development, which could entrench long-term inequality.
Speaking at the report launch, World Bank Lead Economist for Nigeria, Fiseha Haile, stressed that inflation control alone is not enough to reduce poverty.
He emphasized that only inclusive, job-creating growth and strong investment in early childhood development can deliver lasting improvements in living standards.
Conclusion
Despite encouraging signs of easing inflation, the World Bank warns that Nigeria’s economic gains have yet to reach the majority of citizens, as millions continue to face worsening poverty conditions driven by structural economic challenges.
