Nigeria’s poverty rate climbs to 63% despite falling Inflation – World Bank

Nigeria’s poverty rate rose sharply to 63 per cent in 2025 despite a significant decline in inflation, highlighting the limited impact of recent macroeconomic improvements on the living conditions of millions of households, according to the World Bank.

The bank disclosed this in its latest Nigeria Development Update (April 2026) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” released in Abuja.

Data contained in the report showed that the proportion of Nigerians living below the poverty line increased steadily over the past three years, rising from 56 per cent in 2023 to 61 per cent in 2024 before reaching 63 per cent in 2025.

The figure represents roughly 140 million Nigerians now living in poverty.

The rise occurred even as inflation moderated significantly during the period, suggesting that easing price pressures have not yet translated into meaningful improvements in household welfare.

According to data from the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate dropped from 34.80 per cent in December 2024 to 15.15 per cent by December 2025, marking a decline of 19.65 percentage points.

Food inflation also declined sharply over the same period, falling from about 39.84 per cent in December 2024 to 10.84 per cent in December 2025, representing a reduction of nearly 29 percentage points.

Despite this moderation, the World Bank said inflation remains high enough to continue eroding the purchasing power of households.

“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.

The bank explained that the persistence of poverty reflects the cumulative impact of earlier spikes in inflation, which significantly weakened real incomes before the recent slowdown in price increases.

As a result, many households are still grappling with the long-term effects of higher food and energy costs.

The report also linked Nigeria’s rising poverty levels to global economic shocks, particularly tensions in the Middle East, which have pushed up the cost of energy, food and transportation.

“These developments are adding pressure to inflation and poverty, including via food prices,” the World Bank said, noting that low-income households are especially vulnerable because they spend a large share of their earnings on basic necessities.

Beyond inflation, the structure of Nigeria’s economic growth was identified as another major factor limiting progress in poverty reduction.

According to the report, recent economic expansion has been largely driven by the services and industrial sectors, while agriculture — which employs a large share of poor Nigerians — has lagged behind.

“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 bank noted.

This imbalance, it added, has restricted income gains among the most vulnerable segments of the population, preventing economic growth from translating into broad-based improvements in living standards.

Despite the current trend, the World Bank projected that poverty levels could begin to decline gradually from 2026 as inflation continues to ease and macroeconomic conditions stabilise.

It estimated that poverty could fall slightly to around 59 per cent by 2028, driven largely by lower food prices and moderate economic growth.

However, the bank warned that the pace of improvement would remain slow due to structural challenges, including weak job creation, low agricultural productivity and persistent inequality.

It stressed that economic growth alone would not be sufficient to significantly reduce poverty unless it is inclusive and capable of generating large numbers of productive jobs.

The report also highlighted the role of human capital development in tackling poverty, noting that poorer households often face worse outcomes in areas such as nutrition, healthcare and early childhood development.

These challenges, it said, reinforce long-term inequality and reduce opportunities for social mobility.

Speaking at the launch of the report in Abuja, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said poverty remains widespread despite recent macroeconomic improvements.

He warned that inflation, although declining, still poses a risk to household incomes and welfare.

“Inflation remains high and it risks eroding real incomes and slowing poverty reduction,” Haile said.

He emphasised that achieving sustained price stability is essential to improving living conditions, while also calling for policies that promote inclusive growth.

“There is a critical need to bring inflation down and promote growth in a way that ensures citizens feel the benefits of macroeconomic reforms,” he added.

Haile further stressed that the quality of economic growth would determine how quickly poverty declines, noting that stronger investments in human capital — particularly early childhood development — are essential for long-term productivity and poverty reduction.

Also speaking at the event, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government remains committed to lifting millions of Nigerians out of poverty through investment-driven growth and expanded social support programmes.

Edun said the government’s reform agenda is aimed at creating a stable economic environment that would attract both large-scale and small- and medium-sized investments, which he described as critical to job creation and income growth.

“The ultimate goal is lifting Nigerians out of poverty by the millions,” the minister said.

He added that the government is also strengthening social safety nets to protect vulnerable households, particularly during periods of high inflation.

According to him, targeted interventions such as direct benefit transfers are being deployed through digital platforms linked to national identity systems to ensure support reaches those who need it most.

Edun said such measures would remain a permanent feature of government policy, stressing that protecting the poor and vulnerable is essential for any society committed to inclusive development.