Poverty Deepens in Nigeria Despite Easing Inflation, World Bank Warns

Nigeria’s economic recovery narrative has come under fresh scrutiny as new data from the World Bank reveals that poverty levels rose sharply to 63 percent in 2025, even as inflation began to ease.

The report bears a troubling disconnect between macroeconomic improvements and the lived realities of millions of households.

Unveiled in Abuja as part of the Nigeria Development Update (April 2026) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” the report as seen on an online platform, shows a steady rise in poverty over recent years. The proportion of Nigerians living below the poverty line climbed from 56 percent in 2023 to 61 percent in 2024, before reaching 63 percent in 2025, equivalent to roughly 140 million people.

According to the World Bank, the rise in poverty occurred despite a noticeable moderation in inflation, particularly food inflation. However, prices remain high enough to continue eroding purchasing power, leaving many households worse off. The report noted that income growth has not kept pace with the cost of living, meaning that any gains from lower inflation have yet to translate into improved welfare.

“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated, highlighting the lingering effects of earlier price shocks that had already weakened real incomes.

Global developments have also compounded the situation. The report points to geopolitical tensions, particularly in the Middle East, as key drivers of rising energy, food, and transportation costs. These external pressures continue to filter into Nigeria’s domestic economy, disproportionately affecting low-income households that spend a larger share of their earnings on basic necessities.

Beyond inflation, structural weaknesses in Nigeria’s growth model are limiting progress in poverty reduction. The World Bank observed that economic growth has been largely driven by services and industry, while agriculture—the primary source of livelihood for more than half of the poor has lagged behind. This imbalance has restricted income gains among vulnerable populations, slowing the trickle-down effect of growth.

Looking ahead, the bank projects Nigeria’s economy to grow by about 4.2 percent in 2026 but warns that growth alone will not be enough. It urged policymakers to maintain tight monetary policies, avoid broad subsidies, and save windfalls from higher oil revenues to stabilise the economy.

Crucially, the report emphasised the need for deeper structural reforms aimed at inclusive growth. It identified early childhood development as a critical area requiring urgent attention, noting that Nigeria faces some of the worst outcomes globally.

With about 110 deaths per 1,000 children before age five, nearly 40 percent of children stunted, and more than half failing to meet developmental milestones before school age, the situation was described as a full-blown crisis.