Poverty in Nigeria rose to 63 per cent in 2025 despite a slowdown in inflation, underscoring the limited impact of recent macroeconomic improvements on household welfare, the World Bank has said.
The bank disclosed this in its Nigeria Development Update (April 2026) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” released in Abuja on Tuesday.
According to the report, the share of Nigerians living below the poverty line increased from 56 per cent in 2023 to 61 per cent in 2024, before rising further to 63 per cent in 2025—equivalent to about 140 million people.
The increase occurred even as inflation began to ease, highlighting a disconnect between moderating prices and real income growth.
Data from the National Bureau of Statistics show that headline inflation declined from 34.80 per cent in December 2024 to 15.15 per cent in December 2025, a drop of 19.65 percentage points. Food inflation also fell sharply from 39.84 per cent to 10.84 per cent over the same period.
Despite this moderation, the World Bank noted that inflation remained high enough to erode purchasing power and worsen living conditions.
“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.
It added that the persistence of poverty reflects the cumulative effects of earlier inflation spikes, which had already weakened real incomes before the recent easing in prices.
The bank also cited global shocks, particularly the Middle East conflict, as factors pushing up energy, food and transport costs, thereby worsening conditions for low-income households.
Beyond inflation, the report identified structural constraints to poverty reduction, noting that economic growth has been driven largely by services and industry, while agriculture—where more than half of the poor are employed—has lagged behind.
“Growth in the agriculture sector… has lagged services and industry, constraining the pace of poverty reduction,” it said.
This imbalance has limited income gains among vulnerable populations, slowing the translation of economic growth into improved living standards.
Looking ahead, the World Bank projected a gradual decline in poverty from 2026 as inflation continues to ease and macroeconomic conditions stabilise. Poverty is expected to fall to about 59 per cent by 2028, supported by lower food inflation and moderate growth.
However, it warned that the pace of decline would remain slow due to weak job creation, low agricultural productivity and persistent inequality, stressing that growth must be inclusive and job-rich to significantly reduce poverty.
The report also linked poverty to broader human capital challenges, noting that poorer households face worse outcomes in nutrition, health and early childhood development, reinforcing long-term inequality.
Speaking at the report’s launch, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said poverty remains elevated despite recent macroeconomic improvements.
He warned that although inflation has declined, it still risks eroding real incomes and slowing welfare gains, emphasising that price stability is critical to improving living conditions.
Haile added that reducing poverty would depend not only on economic growth but also on its quality, particularly its ability to create jobs and raise incomes among the most vulnerable.
He further stressed that investments in early childhood development are essential for long-term productivity and poverty reduction.
