• Pegs 2024 budget implementation at 24.5%
• Says FG constrained by changing revenue sharing structure  
• ‘Social protection coverage dips to six per cent, 0.14 % of GDP’
• Remove trade barriers on food to reduce hardship, FG advised
• Poverty rate doubles to 58m in six years  
• Edun insists reforms aim at lifting millions from poverty

Economic reforms have corrected past policy missteps, held the country back from slipping into a fiscal crisis and stablised the macroeconomic conditions, but equally increased survival pressure on the citizens, with the number of poor rising by an additional 58 million in six years, the World Bank has said.
 
In its latest Nigeria Development Update (NDU) released yesterday, the bank warned that gains of the reforms – subsidy removal, foreign exchange (FX) market liberalisation and tax system recalibration – remain fragile and unevenly distributed, with the historical structural imbalance in growth and economic inequality deepening.  
 
It pointed at rising poverty, high inflation and falling purchasing power as major setbacks to the reforms, advising the authorities to reduce food inflation, improve the use of public resources for development and strengthen the social safety net to “bring gains home to Nigerians”.
 
The report noted that the number of poor Nigerians rose from 81 million (40 per cent) in 2019 to 139 million or 61 per cent this year, with projections putting the absolute poverty rate at 141 per cent next year. From 2019 to 2023, the report added, average consumption fell by 6.7 per cent, highlighting the sharp deterioration in the welfare of the average Nigerian.
 
The administration of late President Muhammadu Buhari closed Nigerian borders in 2019 to curtail escalating insecurity and protect local farmers, leading to a sharp surge in prices of food and the general price level.
 
The price crisis was worsened by the removal of fuel subsidy, which pushed up the price of motor spirit from about N200 per litre to nearly N900. The 2023 historic FX liberalisation also triggered a sharp fall in the value of the naira.
 
The twin-policy reforms led to a sharp rise in the price of goods and services, with the headline inflation crossing 34 per cent, a three-decade high. Even with rebasing and a consumer price index (CPI) makeover, the inflation rate remains above 20 per cent. In the face of monetary loosening, the World Bank said the authorities still have some work to do to bring down headline inflation below its current level.
 
The bank’s October 2025 NDU, titled ‘From Policy to People: Bringing the Reform Gains Home’, paints a mixed picture, saying: “Growth is up, inflation is easing and foreign reserves are climbing, yet poverty and food insecurity remain entrenched”.
 
It urged Nigeria to remove trade barriers on food and intermediate products as a solution to combating food insecurity. It estimated duties on food importation at between five and 35 per cent, which is considered prohibitive and serves as a major cause of food inflation.
 
While the macroeconomic reforms have averted fiscal collapse, the report said, they have failed to halt a dramatic surge in poverty, with the number of poor Nigerians projected to hit 139 million this year.
 
The report uncovers several critical, previously unreported crises, including a historic shift that has seen state governments collectively receive more federal allocation than the Federal Government for the first time in the nation’s history, crippling the federal government’s capacity to fund national projects.
  
Even more distressing is the surge in “extreme-poverty”, the World Bank reported, noting that the number of Nigerians who cannot meet basic caloric needs even if they spent all their income on food nearly doubled, jumping from 14 per cent to 27 per cent between 2019 and 2023.
 
“Despite recent progress, reform gains have not yet translated into broad-based improvements in living standards. Growth is not strong enough to create sufficient quality jobs and still-high inflation continues to erode real incomes,” the World Bank stated.
 
It projected the poverty rate will peak at 62 per cent (141 million people) in 2026, while stabilising at 61 per cent in 2027. This indicates that the economic recovery will be “timid” and insufficient to reverse the devastating loss of livelihoods for another two years.
 
“Still timid growth and remaining inflationary pressure, particularly from food prices, are expected to further push poverty up,” the report stated, painting a grim picture of the immediate future for millions of Nigerians.
 
The grim projection stands in direct contrast with the declaration by the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, at the Nigerian Economic Summit (NES31) yesterday.  He claimed that the “overall aim and objective of the government’s Renewed Hope Agenda is to embark on massive execution of all the reforms” to reduce the level of poverty and improve the well-being of the citizens.
 
“I will just emphasise that at the end of the day, the reforms must translate to better living standards. They must translate to lifting Nigerians out of poverty in their millions,” Edun stated.
 
 While headline inflation is cooling, the report introduced a shocking new metric that revealed the true depth of the food crisis for the poorest households. The Bank created a CPI-FP index, tracking the price of the eight food items most consumed by the poor. They are rice, palm oil, groundnut oil, white beans, bread, beef, maize flour and yams.
 
The findings are devastating, according to the report. The cumulative inflation for the specific basket was 406 per cent between 2019 and 2024. This is more than double the general food inflation (201 per cent) and two-and-a-half times the headline inflation (161 per cent) over the same period.
 
For the poorest 10 per cent of households, who spend up to 70 per cent of their income on food, this represents an existential threat. The crisis is particularly acute in the Northern regions, which are both the country’s agricultural heartland and its poorest zone, the NDU pointed out.

 It projected a slow and challenging path to price stability, forecasting annual inflation to decline from an average of 23.8 per cent in 2025 to 19.5 per cent in 2026 and 15.8 per cent in 2027.

 The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, whose Monetary Policy Committee (MPR) signaled a monetary policy path at the last meeting, said the authority is committed to single-digit inflation in the medium-term.
 
According to the World Bank, there is a paradigm shift for Nigeria’s federal structure, with the state governments receiving more money from the Federation Account Allocation Committee (FAAC) than the Federal Government last year. State governments reportedly received N5.3 trillion, surpassing the Federal Government’s share of N5 trillion.

 This shift, driven not by a change in the revenue formula but by large deductions for state palliatives and refunds of old debts, the report noted, will have profound implications.
 
The Federal Government, burdened by rising wage bills and interest costs, will remain fiscally constrained following the change it projected. From 2026 through 2027, it projected a consolidated fiscal deficit to gross domestic product (GDP) ratio of 2.8 per cent, with the Federal Government’s space for capital expenditure remaining tight.
 
In stark contrast, states, flush with cash, are expected to continue their spending spree, having nearly tripled their capital spending to N7 trillion in 2024.
 
The report warned that the disparity could create a “growing asymmetry,” where the Federal Government lacks the fiscal space to execute large-scale national infrastructure projects like highways and power grids, while states focus on localised spending.
 
Edun alluded to this trend, noting, “We all know the trajectory of the states in particular. And I must say that the data do show that they are investing in capital expenditure, capital projects. But the overall aim is to draw in the private sector, give them the opportunity to take part in the domestic market and indeed in the international market, based on the new competitiveness that we have in the Nigerian production, manufacturing and indeed industrial sector.”
 
The World Bank’s data confirms this, showing state capital spending nearly tripled in 2024, while the Federal Government’s capital budget execution was a meagre 24.5 per cent.
 
The World Bank directly linked Nigeria’s soaring food prices to government trade policies, providing hard data to settle a long-standing debate. It noted that essential foods like rice, meat, wheat and tomatoes, as well as production inputs like fertilizers, are subject to import bans or “exceptionally high tariffs”.
 
The protectionist policy, it noted, has backfired, leading to massive market concentration. For instance, just three companies account for 96 per cent of rice imports under the waivers granted, while a single company controls 82 per cent of sugar imports.
 
The consequence, as shown in comparative charts, is that Nigeria’s food inflation has consistently and dramatically outpaced its neighbours.  From 2021 to 2024, Nigeria’s average food inflation was around 27 per cent, compared to single digits or low teens in the case of Benin, Cameroon and Niger.
 
With the projected slow decline of overall inflation, food price pressures are expected to remain a heavy burden on households.  The NDU report showed that coverage of the social safety net plummeted from 19 per cent of the population in 2018/19 to just six per cent in 2023, after key programmes under the National Social Investment Programme Agency (NSIPA) were suspended.
 
Nigeria’s spending on social protection is a paltry 0.14 per cent of GDP, compared to a global average of 1.5 per cent. To gap the hole, the report proposed a fiscally feasible solution – providing monthly cash transfers of N22,500 to the ultra-poor, which will cost N2.5 trillion yearly.
 
Crucially, this sum represents only 19.1 per cent of the total deductions made from FAAC revenues in 2024, indicating that the resources can be found with better prioritisation, it stated.
 
The bank urged both federal and state governments to channel the windfall in the FAAC, which rose to N27 trillion in the first eight months of 2025, toward human capital, rather than executive overheads.
 
“Education, health and social protection spending have not increased commensurately with revenue gains. Without coordinated, transparent fiscal management, Nigeria risks wasting the opportunity to convert stabilisation into shared prosperity,” it warned.