Stagnant labour income pushes 47% of Nigerians into poverty, says World Bank

An estimated 47 per cent of Nigerians now live in poverty or below the international poverty line of $2.15 as economic pressure and rapid population growth strain the country’s resources, a World Bank report has said.

The report, ‘Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World’, noted that labour incomes had not kept pace, pushing an additional 14 million Nigerians into poverty in 2024.

Despite the constant increase in the prices of goods and services, and most recently, the petrol price increase, many employers of have failed to raise their employee wages.

To address the swelling poverty rate, the Nigerian government has launched a cash assistance programme aimed at 15 million households, with each household slated to receive N75,000 across three instalments, reaching approximately 67 million individuals.

Despite the measures, the World Bank projects poverty to reach 52 per cent by 2026 if economic reforms are not intensified to protect vulnerable Nigerians from inflation and create more productive job opportunities.

It read: “Labour incomes have not kept pace, pushing an additional 14 million Nigerians into poverty in 2024. An estimated 47 per cent of Nigerians now live in poverty (or below the international poverty line of $2.15 2017 PPP).

“Poverty is estimated at 52 per cent in 2026. Reforms to protect the poorest against inflation and boost livelihoods through more productive work are key for Nigerians to escape poverty. A tight monetary stance while avoiding reliance on ways and means remains crucial for moderating inflation.”

While the Central Bank of Nigeria (CBN) has raised the monetary policy rate by 850 basis points between February and September and increased the cash reserve ratio to curb inflation, these efforts have yet to fully restore purchasing power, the report notes.

The World Bank stressed that macroeconomic stabilisation alone would not enable Nigeria to achieve its growth potential.

“While macro stabilisation is essential and currently underway, by itself it is insufficient to enable Nigeria to reach its growth potential. Sustained efforts and the establishment of a credible track record are necessary to achieve sustained progress.

“Economic growth has struggled to keep pace with population growth, contributing to poverty exacerbated by double-digit inflation,” the report noted.