Nigeria faces a daunting task in its aspiration to be Africa’s leading economy, given the current level of poverty in the country. A high rate of poverty implies a high rate of people who are excluded from active participation in the production process. Yet those people have to be fed, housed, and taken care of.
The local economy emerged as Africa’s largest in 2014, after the rebasing of the GDP that year. Unfortunately, today, it has become the fourth, coming behind South Africa, Egypt, and Algeria. At the 5th position is Ethiopia.
Unless the government intentionally fights poverty and the associated conflicts, the economy will continue to mark time. Therefore, Nigeria’s current fight against poverty needs a revision and change in approach, if it is to work. For now, it is hard to assess its viability and the chances of a significant result to achieve a sustainable economic turnaround soon.
What is clear is that the poverty pipeline in Nigeria has been busy. Each year, millions of Nigerians are ferried into absolute poverty. The World Bank told us this – again – late last year. In its Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World, the Bank declared that in 2024, rising inflation and low labour income pushed 14 million Nigerians into poverty.
The fight against poverty should not be an addendum to the government’s masterplan or economic blueprint. The plan to fight and defeat poverty should not be an appendix to the government’s development agenda. Rather, it should be at the centre of such a plan because at the end of the day, it is the quality of life of the people that best showcases the quality of leadership of the country.
It is pertinent here to remind ourselves that according to the World Bank, 47 per cent of Nigerians currently live below the poverty level of $2.15 a per day. In other words, this percentage of the Nigerian population, almost half, cannot spend about N3,268 per person per day (a rough estimate of the naira equivalent of $2.15 at the current exchange rate).
However, this is not the end of the story. The Bank has also revealed a possibility that should get our policymakers thinking. It is an indication that we might be losing the battle against poverty. “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.”
This projection by the World Bank should worry our policymakers. Should it happen, that will take Nigeria back to somewhere around 2009. That year, a survey by the National Bureau of Statistics showed that extreme poverty headcount rate was 53.5 per cent, the bank said in a 2020 report, citing the bureau. The applicable poverty line then was $1.90 per day, for the Bank updated the global poverty lines in September 2022.
The government could counter the above possibility by raising the NBS inflation report for January 2025. That report showed that inflation came down to 24.48 per cent, all the way from over 34 per cent in December. The truth, however, is that that inflation rate has not worked its way fully into the economy or some sections of it. Food prices are still high in the market, even as of yesterday, Wednesday.
The projection that the poverty rate could revert to its previous level should be related to Nigeria’s high multidimensional poverty rate. The Bureau told a bewildered nation three years ago that as much as 63 per cent of the populace lived in multidimensional poverty. NBS put 63 per cent of the country’s population at 133 million people then.
Taken together, these two pictures project a nation that could be laden with a rising heavy weight of a dependency. Meaningful economic activity, the result of which is wealth or the gross domestic product, is best undertaken by the active members of society. Being active in this sense goes beyond possession of physical stamina: it requires skills, and education, among others.
This explains the fact that poverty is partly caused by lack of jobs that people can do to earn incomes. Except in rare cases, a jobless or unemployed person is poor; without much of a stable disposition and a sense of belonging.
In Algeria, the third-biggest economy in Africa currently, poverty rate is about 35%. The country’s population is about 44.9 million. The Ethiopian Policy Institute reported in October 2024 that the percentage of Ethiopians in multidimensional poverty rose from 68 per cent in 2019 to 72 per cent in 2024. The institute cited a report, Multidimensional Poverty Index (MPI) 2024 titled “Poverty Amid Conflict,” published by the UNDP) and the Oxford Poverty and Human Development Initiative.
The report further stated that an additional 18 per cent of the population was susceptible to multidimensional poverty. It added that out of the country’s 120 million people, 86 people are in poverty, representing a 72 percent poverty ratio.
The point here about Nigeria and Ethiopia is that both are obviously nations with great potentials. However, they have been hamstrung by internal challenges. These challenges, chiefly internal conflicts, have weakened their ability to perform at their optimum. Poverty has added to their burdens.
This is according to the World Bank’s latest report on Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World.
The report noted that nearly 47 per cent of the Nigerian population now lives below the international poverty line of $2.15 per day, as surging inflation and a struggling economic structure fail to meet the demands of rapid population growth.
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.”
In response to the rising poverty levels, the report noted that the Nigerian government has launched temporary cash assistance initiatives targeting 15 million households.
Each household will receive N75,000, distributed in three instalments, benefitting an estimated 67 million people overall.
The World Bank added, “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.”
To curb inflationary pressures, the Central Bank of Nigeria raised the monetary policy rate by 850 basis points from February to September 2024, alongside an increase in the cash reserve ratio.
Yet, inflation continues to erode household purchasing power, compounding the hardship for millions, the report noted.
The World Bank stressed the need for continued reforms, noting that “While macro stabilization 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 Washington-based lender called for a comprehensive approach to bolster resilience and create sustainable pathways out of poverty for the millions affected.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, earlier said that the social investment programme has expanded its reach to 25 million vulnerable Nigerians from five million households.
The programme involves direct cash transfers to individuals on the social register, verified through biometric identification and paid through bank accounts or mobile wallets.
Edun, who spoke with reporters at the State House, Abuja, after the 145th meeting of the National Economic Council, said that the first and second payments have already been made to beneficiaries
The World Bank updated the global poverty lines in September 2022. The decision, announced in May, follows the release in 2020 of new purchasing power parities (PPPs)—the main data used to convert different currencies into a common, comparable unit and account for price differences across countries. The new extreme poverty line of $2.15 per person per day, which replaces the $1.90 poverty line, is based on 2017 PPPs. Here you find more information about this change and what it means for measuring global poverty.
