The Escalating Poverty Crisis in Nigeria
The World Bank recently released a report stating that approximately 61% of Nigeria’s population — around 139 million people — now live in poverty, a significant increase from 40% or 81 million people in 2019. This alarming figure has sparked discussions about the effectiveness of economic policies and the government’s response to the crisis. In an interview with News Central TV, Izuchukwu Clement Igbanugo, former Head of Research at Financial Derivatives Company Limited (FDC) and founder of ACPAE Consulting Limited, provided insights into the reasons behind the rising poverty levels.
Government Disagreement with World Bank Findings
Despite the World Bank being one of Nigeria’s key development partners, the national government appears to be rejecting its findings. This contradiction raises questions about the disconnect between official narratives and the actual situation on the ground. Igbanugo highlighted that his own estimates place the number of poor Nigerians at around 145 million, which closely aligns with the World Bank’s figures. He pointed out that some government officials have insisted that poverty has decreased, which he argues is not true.
The World Bank’s methodology is considered credible, using consumption-based models rather than just income-based ones. Their surveys are conducted locally and adjusted for inflation and population trends, making them among the most robust globally. Therefore, it is clear that Nigeria’s poverty situation has worsened over the years.
Economic Reforms and Their Impact
While the World Bank described Nigeria’s economic reforms as “bold,” Igbanugo emphasized that their implementation has been anti-people. When reforms do not prioritize the welfare of citizens, poverty inevitably worsens. He explained that poverty is about capability — the ability to live decently, access food, healthcare, and education. If these capabilities are eroded, people become poorer.
The government’s insistence on the World Bank’s figures being unrealistic comes despite high levels of food inflation (around 40%) and unemployment near 35%. Igbanugo argued that the government did not underestimate the short-term effects of its policies but failed to consider the social consequences altogether.
Fuel Subsidy Removal and Inflation
One of the key issues is the removal of fuel subsidies. In 2022, the government spent $10 billion on subsidies, which now equals about N15 trillion. By ending subsidies, the government effectively took N15 trillion from households, making them poorer. This policy change acts like a reverse tax, further exacerbating the economic challenges faced by ordinary Nigerians.
Inflation itself is another significant factor. With inflation rates rising from 28% in 2023 to 33% in 2024 and reaching 40% in 2025, the purchasing power of Nigerians has drastically declined. For example, someone earning N100,000 in early 2023 could buy 100 tubers of yam, but by 2025, they could only afford fewer tubers. This decline in purchasing power clearly indicates that people are worse off under the current policies.
Relief Measures and Their Effectiveness
The government has introduced relief measures such as cash transfers, education funding, and student loans. However, many argue that these initiatives have not adequately cushioned the hardship. Igbanugo pointed out that distributing N297 billion to 15 million households results in roughly N19,000 per household annually. With an average of five people per household, this amounts to about N4,000 per person per year — barely enough to buy a few loaves of bread.
Additionally, student loans and other programs have limited reach, with many vulnerable individuals unable to access them. The lack of effective safety nets has left millions of households without adequate support.
Recommendations for Policy Adjustments
Igbanugo offered several recommendations for the government to improve living standards for ordinary Nigerians. First, he emphasized the need to abandon the idea that a market economy means zero subsidy or zero welfare. Every capitalist economy, including those in the U.S., U.K., and Canada, maintains some form of subsidy.
Second, he called for a shift from state-centric to people-centric governance. Successful reforms in countries like Poland and Israel were carefully phased and accompanied by social safety nets, unlike Nigeria’s abrupt and unplanned approach.
Third, transparency and accountability are crucial. The so-called social register remains inaccessible to the public, raising concerns about the verification of beneficiaries. Lastly, Nigeria must mainstream poverty reduction strategies into every policy, ensuring that fiscal planning, healthcare, agriculture, and education all contribute to reducing poverty.
Today, about 139 million Nigerians live in poverty — meaning one in every five poor people on Earth is Nigerian. While Nigeria accounts for roughly one in 50 of the world’s population, it represents one in five of its poor. This situation demands urgent attention and action from the government to ensure that future reforms truly benefit the people. Until the government acknowledges the problem and designs policies around people, not just numbers, Nigeria will continue to record “bold” economic reforms — but poorer citizens.
