The World Bank has disclosed that Nigeria’s poverty rate climbed to 63 per cent in 2025, despite a significant decline in inflation, highlighting the limited impact of recent macroeconomic improvements on household welfare.
The revelation was contained in the bank’s 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 proportion of Nigerians living below the poverty line rose steadily from 56 per cent in 2023 to 61 per cent in 2024, before reaching 63 per cent in 2025, representing an estimated 140 million people.
The bank noted that the increase occurred even as inflation began to moderate, underscoring a disconnect between easing price pressures and improvements in real incomes.
Data from the National Bureau of Statistics showed that headline inflation declined sharply from 34.80 per cent in December 2024 to 15.15 per cent in December 2025. Similarly, food inflation dropped from 39.84 per cent to 10.84 per cent within the same period.
Despite this decline, the World Bank warned that inflation remained sufficiently high 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 lingering effects of earlier inflation spikes, which had already weakened real incomes before prices began to ease.
The report also identified global factors, including the Middle East crisis, as contributing to higher energy, food and transportation costs, further straining low-income households.
Beyond inflationary pressures, the bank pointed to structural challenges hindering poverty reduction, particularly the slow growth of the agricultural sector, where a large share of the poor are employed.
It observed that while services and industry have driven economic expansion, agriculture has lagged behind, limiting income growth among vulnerable populations and slowing improvements in living standards.
Looking ahead, the World Bank projected a gradual decline in poverty from 2026 as inflation continues to ease and macroeconomic conditions stabilise.
It estimated that the poverty rate could drop to about 59 per cent by 2028, supported by lower food prices and moderate economic growth.
However, the bank cautioned that the pace of reduction would remain slow due to weak job creation, low agricultural productivity, and persistent inequality, stressing the need for inclusive and employment-driven growth.
The report further linked poverty to broader human capital challenges, noting that poorer households often face worse outcomes in nutrition, healthcare, and early childhood development.
Speaking at the report’s presentation, the bank’s Lead Economist for Nigeria, Fiseha Haile, said poverty levels remain elevated despite recent economic gains.
He emphasised that while inflation has eased, sustained price stability is essential to protect real incomes and improve welfare.
Haile added that reducing poverty would depend not only on economic growth but also on its ability to generate jobs and raise incomes for the most vulnerable groups.
He also stressed the importance of investing in early childhood development as a critical pathway to long-term productivity and poverty reduction in the country.
