Poverty worsens to 63% despite inflation relief, World Bank warns

The World Bank has revealed that the poverty rate in Nigeria will increase to 63 percent by 2025, indicating the limited impact of easing inflation on the living conditions of millions of households.

These findings were published in the Nigeria Development Update (April 2026) entitled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” which was launched in Abuja.

According to the report, the proportion of Nigerians living below the poverty line continues to increase from 56 percent in 2023 to 61 percent in 2024, before reaching 63 percent in 2025—equivalent to about 140 million people.

This increase occurred even when inflation showed a significant decline. Data from the National Bureau of Statistics shows that general inflation fell from 34.80 percent in December 2024 to 15.15 percent in December 2025. Food inflation also fell sharply from 39.84 percent to 10.84 percent in the same period.

Despite the decline, the World Bank said this assistance had not had an impact on improving household welfare, because the previous price spike had weakened purchasing power.

The report states, “Household incomes have not grown fast enough to keep pace with still-rising inflation, and poverty has not begun to decline.”

The report explains that although inflation is declining, its lingering impact—combined with previous inflation spikes—continues to erode real incomes, leaving many Nigerians in worse conditions.

The report also cited global pressures, including Middle East conflicts, that have increased energy, food and transportation costs, putting further pressure on household budgets. These developments, the bank said, “add pressure on inflation and poverty, including through food prices,” especially for low-income families who spend a large share of their income on basic needs.

Apart from price pressures, the structure of Nigeria’s economic growth was also identified as another constraint. The World Bank observes that although the services and industrial sectors have driven recent growth, agriculture—where the majority of Nigeria’s poor work—still lags behind.

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“Growth in the agricultural sector—where more than half of the poor work—has lagged behind that of the services and industrial sectors, hampering the pace of poverty reduction,” the World Bank said.

Although the 2025 figures paint a gloomy picture, the report projects gradual improvement starting in 2026 as inflation continues to decline and economic conditions stabilize.

The report states, “While poverty levels are increasing, a gradual decline is expected by 2026 as inflation declines.”

The World Bank estimates that poverty will fall to around 59 percent by 2028, driven by low food prices and moderate economic expansion. However, the report warns that progress may be slow due to structural challenges such as weak job creation, low agricultural productivity and persistent inequality.

At the presentation of the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, emphasized that inflation remains a major obstacle to improving living standards.

He said the figure “is still high… and risks eroding real incomes and slowing poverty reduction,” and added that continued price stability is critical to achieving meaningful prosperity.

Haile further noted “the critical need to lower inflation… and boost growth and ensure growth is more inclusive, to ensure that society… feels the benefits of macroeconomic reforms.”

He emphasized that overcoming poverty does not just require growth, but growth that creates jobs and increases income, especially for vulnerable groups. He also highlighted the importance of investing in human capital, and emphasized that early childhood development “is the foundation for… productivity, and of course, poverty alleviation.”

Also speaking, the Minister of Finance and Coordinating Minister for the Economy of Nigeria, Wale Edun, said the government remained focused on policies aimed at lifting its citizens out of poverty.

He described the “ultimate goal” of the ongoing reforms as “lifting millions of Nigerians out of poverty,” stressing that macroeconomic stability must be complemented by investment and job creation.

Edun explained that the government is trying to create an environment that supports investment in large and small scale businesses, which according to him is important for reducing poverty levels.

He also reaffirmed the government’s commitment to social protection for vulnerable groups, especially amidst the increasing cost of living.

“There remains a commitment to implement social safety nets that help the poorest communities, especially the most vulnerable, to cope with rising costs,” he said.

According to him, targeted interventions such as direct benefit transfers are carried out using digital systems to ensure aid reaches those who need it most.

He added that such measures would remain at the heart of government policy, and stressed that supporting vulnerable groups was essential in a “caring society.”

While acknowledging the ongoing pressure from global energy and food prices, Edun emphasized that efforts are ongoing to stabilize the economy and improve the living conditions of Nigerians.