Stagnant labor incomes lead to an estimated 14 million more Nigerians experiencing poverty in 2024, according to the World Bank’s report, Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World.
The report indicates that nearly 47% of Nigerians live below the international poverty line of $2.15 per day, as economic pressures and rapid population growth strain national resources. It states, “Labor incomes have not kept pace, pushing an additional 14 million Nigerians into poverty in 2024.”
In response to the increasing poverty rate, the Nigerian government has initiated cash assistance programs targeting 15 million households, with each receiving N75,000 in three installments, benefiting approximately 67 million individuals. However, the World Bank warns that without intensified economic reforms, poverty could rise to 52% by 2026, exacerbated by inflation and a lack of productive job opportunities.
The report emphasizes, “Poverty is estimated at 52% in 2026. Reforms to protect the poorest against inflation and enhance livelihoods through productive work are essential for Nigerians to escape poverty. Maintaining a tight monetary policy while avoiding reliance on unconventional financing methods is crucial for moderating inflation.”
While the Central Bank of Nigeria (CBN) has increased the monetary policy rate by 850 basis points from February to September 2024 and raised the cash reserve ratio to combat inflation, these measures have not fully restored purchasing power.
The World Bank asserts that macroeconomic stabilization alone will not allow Nigeria to reach its growth potential. It notes, “While macro stabilization is essential and currently underway, it is insufficient for achieving Nigeria’s growth potential. Sustained efforts and a credible track record are necessary for progress.”
The report highlights the urgent need for reforms as economic growth struggles to keep pace with population growth, contributing to increased poverty and persistent double-digit inflation. A comprehensive strategy is required to enhance resilience and establish sustainable pathways out of poverty for millions of affected individuals.
Additionally, the World Bank previously indicated that rising inflation and stagnant wages pushed 10 million Nigerians into poverty in 2023. It underscores a challenging reality where nominal earnings fall significantly behind inflation rates, limiting economic growth’s impact on living standards. Approximately 34.3% of Nigerian workers aged 15 and older are categorized as working poor, living below the poverty line despite being employed, often due to low-skilled and low-wage jobs.
