World Bank Report: 63% of Nigerians Living in Poverty Despite Inflation Decline
The World Bank has released a sobering report indicating that Nigeria's poverty rate climbed to 63% in 2025, with approximately 140 million citizens living below the poverty line. This troubling increase occurred despite significant reductions in both headline and food inflation rates throughout the year.
Steady Rise in Poverty Figures
According to the "Nigeria Development Update (April 2026): Nigeria's Tomorrow Must Start Today: The Case for Early Childhood Development" report, poverty levels have shown a consistent upward trajectory since the current administration took office. The data reveals a steady climb from 56% in 2023 to 61% in 2024, before reaching the current peak of 63% in 2025.
This persistent increase highlights a critical disconnect between macroeconomic improvements and household welfare. While inflation rates have moderated substantially, this price stabilization has failed to translate into meaningful income growth for most Nigerian families.
Inflation Reduction Without Income Growth
The National Bureau of Statistics documented a dramatic decline in headline inflation from 34.80% in December 2024 to 15.15% by December 2025, representing a drop of 19.65 percentage points. Similarly, food inflation decreased from 39.84% to 10.84% during the same period, marking a reduction of approximately 29 percentage points.
"Incomes coming into households have not increased sufficiently to cover the impact of still-high inflation, and poverty has yet to start falling," the World Bank report stated. The document further explained that prolonged inflationary pressures had already eroded real incomes before the recent price moderation, making the current relief insufficient to reverse welfare declines.
Structural Economic Imbalances
Beyond inflation dynamics, the World Bank identified fundamental structural issues within Nigeria's economy that have constrained poverty reduction efforts. The report observed that economic growth has been primarily driven by services and industrial sectors, while agriculture—which employs more than half of Nigeria's poor population—has significantly 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 emphasized. This imbalance has limited income increases among the poorest segments of society and slowed the transmission of economic growth into improved living standards.
Global Factors and Domestic Challenges
The report also noted that global shocks, particularly conflicts in the Middle East, have contributed to rising living costs through increased energy, food, and transport prices. These external pressures have exacerbated Nigeria's domestic challenges, placing additional strain on low-income households that allocate substantial portions of their budgets to basic necessities.
World Bank Lead Economist for Nigeria, Fiseha Haile, speaking at the report's launch in Abuja, warned that "inflation continues to undermine real incomes and slow welfare gains." He stressed that price stability remains critical to improving living conditions and that sustainable inflation reduction is central to effective poverty alleviation strategies.
Government Response and Future Projections
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, responded to the report by outlining the government's poverty reduction strategy. He emphasized that macroeconomic stability alone would be insufficient without increased investment and job creation, stating that the "ultimate goal" of ongoing reforms is "lifting Nigerians out of poverty by the millions."
The government's approach focuses on creating a stable economic environment to attract both large-scale and small-to-medium-scale investments while strengthening social safety nets to protect vulnerable groups during periods of economic transition.
Long-Term Outlook and Recommendations
Despite the current high poverty levels, the World Bank anticipates a gradual decline beginning in 2026 as inflation becomes more controlled and economic conditions stabilize. The report forecasts that poverty rates may decrease to approximately 59% by 2028, assuming continued reductions in food inflation and moderate economic growth.
However, the bank cautioned that progress will likely be slow due to persistent structural limitations including:
- Inadequate job creation mechanisms
- Low agricultural productivity
- Persistent economic inequality
- Weak human capital development
The report concluded that relying solely on economic growth would be insufficient to substantially reduce poverty unless that growth becomes more inclusive and generates significant employment opportunities. The World Bank emphasized that reforms aimed at boosting livelihoods—particularly through expanded access to productive work—are critical to reversing Nigeria's persistently high poverty levels.
