63% of Nigerians living in poverty despite reduction in inflation rate – World Bank reports

The World Bank has attributed the rise in poverty in Nigeria to 63 percent in 2025, to the limited effect of recently improved macroeconomics on the living standards of households. Inflation has been slowing down.

This information is part of a report from the World Bank titled "Nigeria Development Update (April 2026): Nigeria's Tomorrow Must Start Today: The Case for Early Childhood Development," which was made public in Abuja on Tuesday.

According to figures in the publication, the proportion of Nigerians below the poverty line rose from 56 percent in 2023 to 61 percent in 2024 and 63 percent in 2025.

About 140 million Nigerians, the number getting into poverty, rose to 63 percent, even when inflation was softening, which implies price moderation was not translating to real income growth.

According to reports, Nigeria’s headline inflation rate declined sharply from 34.80 per cent in December 2024 to 15.15 per cent in December 2025, representing a drop of 19.65 percentage points, according to data from the National Bureau of Statistics.

In a like manner, the decrease in food inflation was from the level of 39.84 per cent in December 2024 to 10.84 per cent in December 2025, which implies a decline by about 29 percentage points during the period.

Both headline and food inflation decreased sharply, which indicates that price pressures were loosening and base effects were working, among other factors, a CPI rebasing. But the consummation of a rise before the spike had already taken away the purchasing power of the households.

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The World Bank noted that inflation went down significantly, especially food inflation, it was still at a level to cause loss of purchasing power and degradation of living conditions for many households.

It remarked, "Incomes coming into households have not increased sufficiently to cover the impact of still-high inflation, and poverty has yet to start falling."

Furthermore, it recognizes the prolonged nature of poverty as a consequence of the relentless inflationary pressures in the past that had already dampened real incomes even before the recent drop in prices. Hence, the relief from inflation has not been enough to undo these declines in welfare.

The bank further noted that global shocks, especially the Middle East conflict, contributed to rising living costs through higher energy, food, and transport prices. It said these developments are “adding pressure to inflation and poverty, including via food prices,” worsening the situation for low-income households that spend a large share of their income on basic needs.

Beyond inflation, the structure of Nigeria’s economic growth has also constrained poverty reduction. The report observed that growth has been largely driven by services and industry, while agriculture—which employs more than half of the poor—has lagged.

“Growth in the agriculture sector—where more than half of the poor work—has lagged services and industry, constraining the pace of poverty reduction,” the World Bank stated.

This imbalance, according to the explanation, has curtailed the income increase of the poorest parts of the population. Consequently, the transmission of economic growth gains into better living standards has been a slow process.

Although the official forecast charged the poverty level to have risen in 2025, the report anticipates a slow return to a lower level from 2026 onward, when inflation will have become less aggressive, and the general economic condition will have been stabilized. In fact, it noted, "Even though poverty levels are still high, a decline is expected to be initiated from 2026 as inflation is brought under control."

The World Bank also indicated that poverty, when using the national poverty line as a benchmark, is forecast to decrease marginally in the short term and, with a drop in food inflation and moderate economic growth, may fall to around 59 per cent by 2028.

On the other hand, it cautioned that the rate of decline will probably be slow due to some long-term limitations such as poor job creation, low output of agriculture, and high inequality that has been going on for a long time. The document noted that relying on economic growth alone would not be the way to make a big dent in poverty unless it is inclusive and generates a lot of new jobs.

It stressed that reforms aimed at boosting livelihoods—particularly by expanding access to more productive work—are critical to reversing Nigeria’s high poverty levels.

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The bank also linked poverty outcomes to broader human capital challenges, noting that poorer households tend to experience worse outcomes in areas such as nutrition, health, and early childhood development, reinforcing long-term inequality.

Speaking at the launch of the report in Abuja, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said poverty in the country remains high despite recent macroeconomic improvements, warning that inflation continues to undermine real incomes and slow welfare gains.

He noted that while inflation has declined in recent years, it “remains high… and it risks eroding real incomes and slowing poverty reduction,” stressing that price stability is critical to improving living conditions.

Haile emphasised that reducing inflation sustainably is central to tackling poverty, adding that there is a “critical need to bring inflation down… and promote growth and make sure it’s more inclusive, to make sure that citizens… feel the benefits of the macroeconomic reforms.”

He further highlighted that poverty reduction in Nigeria would depend not just on growth, but on the quality of that growth, particularly its ability to create jobs and improve incomes for the most vulnerable.

The economist also pointed to structural drivers of poverty, especially weak human capital outcomes, noting that investments in early childhood development are key to long-term poverty reduction. According to him, early childhood development “is the foundation for… productivity, and of course, poverty reduction.”

Also speaking during a panel session at the launch, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government is prioritising policies aimed at lifting millions of Nigerians out of poverty through investment-driven growth and targeted social support.

Edun said the “ultimate goal” of ongoing reforms is the “lifting Nigerians out of poverty by the millions,” stressing that macroeconomic stability alone would not be sufficient without increased investment and job creation.

He explained that the government’s strategy is anchored on creating a stable and incentivised economic environment that would attract both large-scale and small- and medium-scale investments, which he described as critical to reducing poverty.

The minister added that beyond growth, the government remains committed to protecting vulnerable groups, especially in periods of rising inflation, noting that social safety nets are being strengthened to cushion the impact of higher living costs.

“There is still that commitment to have in place a social safety net that helps the poorest, the most vulnerable in particular, to cope with elevated costs,” he stated.

Edun went on to clarify that measures like direct benefit transfers are being carefully rolled out, using digital systems that connect to national identity records. This approach ensures that help gets directly to those who need it most.

He pointed out that these kinds of social measures are intended to be a permanent part of the government's plans, stressing that supporting the poor and vulnerable is a fundamental part of what makes a society truly caring.

The minister also acknowledged that global factors, especially surging energy and food costs, are putting pressure on finances. He cautioned that these trends could have a knock-on effect on inflation.