Stagnant labor incomes have pushed an estimated 14 million more Nigerians into poverty in 2024.
This is according to the World Bank report titled Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World.
The report reveals that nearly 47% of Nigerians now live below the international poverty line of $2.15 per day, as economic pressures and rapid population growth further strain the nation’s resources.
It read, “labor incomes have not kept pace, pushing an additional 14 million Nigerians into poverty in 2024. An estimated 47% of Nigerians now live in poverty (or below the international poverty line of US$2.15 2017 PPP).”
To address the swelling poverty rate, the Nigerian government has launched cash assistance programs aimed at 15 million households, with each household slated to receive N75,000 across three instalments, reaching approximately 67 million individuals.
Despite these measures, the World Bank projects poverty to reach 52% by 2026 if economic reforms are not intensified to protect vulnerable Nigerians from inflation and create more productive job opportunities.
The World Bank noted, “Poverty is estimated at 52% 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 from February to September 2024 and increased the cash reserve ratio to curb inflation, these efforts have yet to fully restore purchasing power, the report notes.
Macroeconomic stabilization is not enough
The World Bank stresses that macroeconomic stabilization alone will not enable Nigeria to achieve its growth potential.
“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 report noted.
It stressed the urgency of reform as the country faces challenges of economic growth lagging behind population expansion.
It also called for a comprehensive approach to bolster resilience and create sustainable pathways out of poverty for the millions affected.
What you should know
- The World Bank earlier said that rising inflation and weak earnings have pushed 10 million Nigerians into poverty in 2023.
- It presented a grim reality where nominal earnings have drastically lagged behind the surging inflation rates, rendering the economic growth of the country insufficient to improve living standards.
- It attributed this dire situation to a combination of weak macroeconomic fundamentals and deep-seated structural constraints.
- The World Bank also noted that about 34.3% of Nigerian workers, aged 15 and older, are working poor, living below the poverty line despite being employed.
- It added that many workers in Nigeria are trapped in poverty due to low-skilled and low-wage jobs.
