Over 129 million Nigerians Would Remain Poor in 2026 – World Bank

Over 129 million Nigerians are still expected to be poor by 2026 despite the country’s ongoing economic reforms. This is according to the World Bank‘s macro-poverty outlook for 2024.

It would be recalled that the World Bank had earlier stated that about 129m Nigerians currently lived below the poverty line of US$2.15 per day. However, according to the recent projection, the figure is about to go higher.

Nigeria’s Poverty Outlook

According to Nigeria’s poverty outlook, the country is expected to experience a 2.1 percent population growth by 2026, hence the need for a significantly higher per capita growth to boost living standards.

These figures come as a cause of worry for many Nigerians who have had to go through a lot of economic uncertainty as a result of the economic reforms embarked upon by President Bola Ahmed Tinubu’s administration upon assumption of office.

As a result of these reforms, labor incomes have not been up to date with the economic realities of citizens, pushing an additional 14 million Nigerians into poverty in 2024.

President Tinubu’s Economic Reforms

On assumption of office, president Tinubu announced the removal of fuel Subsidy. This decision caused a hike in fuel prices. The CBN also made the decision to float the naira, causing a sharp rise in the cost of goods and services, and an inflation rate which by September 2024 had reached 32.70%.

The current administration also announced the unification of Nigeria’s exchange rate, which effectively eliminated the parallel market premium and implicit FX subsidy.  The current administration also embarked upon deficit monetization and returning the CBN to its core mandate of price and financial stability.

With inflation rising, the CBN raised the monetary policy rate by 850 basis points between February and September 2024, increased the cash reserve ratio from 32.5 to 50 percent, conducted open market operations, and halted deficit financing to address the fiscal challenges of the country.

These reforms, while necessary for long-term economic sustainability, have come at a high cost for ordinary Nigerians, many of whom now find themselves wallowing in poverty.

The Road Ahead

While the current economic projections for Nigeria present a gloomy situation, its fulfilment is inevitable if stronger policies are not put in place to protect the poorest against inflation and boost their livelihoods through more productive work.

If the government can implement its economic reforms comprising ambitious tax reforms, control inefficient expenditures, and adopt a plan to gradually phase out the implicit petrol subsidy while also avoiding a return to multiple exchange rate regimes and sector-specific implicit subsidies, there might be more hope for the country’s citizens.

However, a slower than planned conclusion and implementation of the ongoing economic reforms would further compound the country’s poverty woes which would not be good for the country.

 

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