Rising inflation, interest rates, and naira depreciation could push 13 million more Nigerians below the national poverty line by 2025.
This is according to a new report titled “2025 Nigerian Budget and Economic Outlook” by PricewaterhouseCoopers International Limited.
According to the PwC, “Macroeconomic pressure points such as rising inflation, interest rate and naira depreciation may drive additional 13 million people below the national poverty line by 2025.”
The British agency noted “The number of people living below the national poverty line is projected to increase by about 13 million by 2025” due to the country’s rising inflation and cost of living.
The report projected a significant increase in the number of people living below the poverty line, citing these economic headwinds as major contributors.
As reported by the National Bureau of Statistics, the headline inflation rate in Nigeria is currently at 34.80% in December 2024.
Increase in minimum wage affects only 4.1% of the population
Recent minimum wage increase from N30,000 to N70,000 in Nigeria have had a limited impact on the overall population, affecting only a small percentage of the populace, PwC says.
The majority of Nigerians are employed in the informal sector, such as agriculture, small-scale businesses, and street vending. These sectors are often outside the scope of minimum wage regulations.
“Additionally, the recent increase in minimum wage only covers 4.1% of the population, highlighting the limited impact of this measure on alleviating poverty and providing financial relief to the majority of Nigerians,” PwC noted.
President Bola Tinubu has described an increment in wages as paying workers “good and living wages” during his first media chat in December.
Also, the president of the Manufacturers Association of Nigeria (MAN), Chief Francis Meshioye, has said that the manufacturing sector was severely impacted in 2024 by macroeconomic challenges specifically the high inflation rate, high interest rates, and the Naira’s depreciating value
FG’s action
Recently, Prof. Nentawe Yilwatda, the Minister of Humanitarian Affairs and Poverty Reduction announced the federal government’s plan to distribute N75,000 cash transfers to an estimated 70 million ‘poorest of the poor’ Nigerians by 2025.
“The target of the president is that we should target 15 million households. And an average household is about 4 to 5. We are discussing here roughly about 70 million households with about N75,000 per person this year,” the minister noted.
Earlier in January 2024, President Tinubu suspended all programs managed by the National Social Investment Programme Agency (NSIPA) and the Ministry of Humanitarian Affairs and Poverty Alleviation due to allegations of misappropriation, including those under the direct cash transfer initiative.