An additional 14 million Nigerians are predicted to fall into poverty in 2024 as a result of stagnant labor wages.
The Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World report from the World Bank supports this.
According to the research, as economic pressures and rapid population expansion further tax the country’s resources, approximately 47% of Nigerians live below the international poverty threshold of $2.15 per day.
It stated, “Labour incomes have not kept pace, forcing an additional 14 million Nigerians into poverty by 2024. An estimated 47% of Nigerians are now impoverished (or below the international poverty level of US$2.15 in 2017 PPP).”
The Nigerian government has implemented cash assistance programs targeting 15 million homes to combat the country’s rising poverty rate. Each household would receive N75,000 over three installments, reaching over 67 million people.
Despite these steps, the World Bank predicts that if economic reforms are not accelerated to shield vulnerable Nigerians from inflation and generate more productive work possibilities, poverty will reach 52% by 2026.
The World Bank said, “Poverty is estimated at 52% in 2026. Reforms to protect the poorest against inflation and boost livelihoods through more productive work are key for Nigerians to escape poverty. A tight monetary stance while avoiding reliance on ways and means remains crucial for moderating inflation”
According to the research, the Central Bank of Nigeria (CBN) has boosted the cash reserve ratio and the monetary policy rate by 850 basis points between February and September 2024 to reduce inflation. Still, these measures have not yet completely restored buying power.
Macroeconomic Stability Not Sufficient
The World Bank emphasizes that macroeconomic stabilization won’t allow Nigeria to reach its full growth potential.
“Macro stabilization is necessary and is happening right now, but it is not enough on its own to allow Nigeria to realize its full growth potential. Sustained efforts and the establishment of a credible track record are necessary to achieve sustained progress.
“Economic growth has struggled to keep pace with population growth, contributing to poverty exacerbated by double-digit inflation,” according to the research.
It emphasized how urgent reform is given the nation’s problems with economic development trailing population growth.
It also demanded a comprehensive strategy to increase resilience and establish long-term routes out of poverty for the millions impacted.
What To Note
Prior to this, the World Bank claimed that 10 million Nigerians were living in poverty in 2023 due to inadequate incomes and growing inflation.
It showed a sobering reality: nominal incomes have significantly underperformed the rising inflation rates, making the nation’s economic growth insufficient to raise living standards.
It ascribed this catastrophic condition to long-standing structural restrictions and weak macroeconomic fundamentals.
According to the World Bank, around 34.3% of Nigerian workers who are 15 years of age or older are employed yet live below the poverty line.
It further stated that Nigeria’s low-skilled and low-paying jobs have left many impoverished.
