Nigeria’s poverty rate increased to 63 per cent in 2025, despite easing inflation, highlighting the minimal effect of recent macroeconomic gains on household welfare, according to the World Bank.
The institution revealed this in its April 2026 Nigeria Development Update, titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” unveiled in Abuja on Tuesday.
According to the report, the share of Nigerians living below the poverty line increased from 56 per cent in 2023 to 61 per cent in 2024, before rising further to 63 per cent in 2025—equivalent to about 140 million people.
The increase occurred even as inflation began to ease, highlighting a disconnect between moderating prices and real income growth.
Data from the National Bureau of Statistics show that headline inflation declined from 34.80 per cent in December 2024 to 15.15 per cent in December 2025, a drop of 19.65 percentage points. Food inflation also fell sharply from 39.84 per cent to 10.84 per cent over the same period.
Despite this moderation, the World Bank noted that inflation remained high enough to erode purchasing power and worsen living conditions.
“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.
It added that the persistence of poverty reflects the cumulative effects of earlier inflation spikes, which had already weakened real incomes before the recent easing in prices.
The bank also cited global shocks, particularly the Middle East conflict, as factors pushing up energy, food and transport costs, thereby worsening conditions for low-income households.
Beyond inflation, the report identified structural constraints to poverty reduction, noting that economic growth has been driven largely by services and industry, while agriculture—where more than half of the poor are employed—has lagged behind.
This imbalance has limited income gains among vulnerable populations, slowing the translation of economic growth into improved living standards.
Looking ahead, the World Bank projected a gradual decline in poverty from 2026 as inflation continues to ease and macroeconomic conditions stabilise. Poverty is expected to fall to about 59 per cent by 2028, supported by lower food inflation and moderate growth.
However, it warned that the pace of decline would remain slow due to weak job creation, low agricultural productivity and persistent inequality, stressing that growth must be inclusive and job-rich to significantly reduce poverty.
The report also linked poverty to broader human capital challenges, noting that poorer households face worse outcomes in nutrition, health and early childhood development, reinforcing long-term inequality.
Speaking at the launch of the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, noted that poverty remains high despite recent macroeconomic gains.
He cautioned that while inflation has eased, it continues to pose a threat to real incomes and could hinder improvements in welfare, stressing that maintaining price stability is vital for better living standards.
Haile added that tackling poverty will require not just economic growth, but growth that is inclusive—capable of generating jobs and boosting incomes for the most vulnerable.
He also underscored the importance of investing in early childhood development as a key driver of long-term productivity and sustained poverty reduction.
