World Bank: Poverty Rate Hits 63% in Nigeria Despite Inflation Slowdown

Inflation Eases but Poverty Rises to 63% in Nigeria, World Bank Warns

The World Bank has reported that approximately 63% of Nigerians are now living in poverty, despite a recent slowdown in inflation. The finding underscores persistent structural challenges in the economy, where easing price pressures have yet to translate into improved living standards for a majority of households.

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Inflation Moderation Fails to Improve Living Conditions

While inflation has shown signs of deceleration in recent months, the impact on household welfare remains limited. According to the World Bank, the pace of price increases may be slowing, but the cumulative effect of sustained high inflation has already eroded purchasing power across income groups.

Food inflation, in particular, continues to exert pressure on low-income households, which allocate a significant portion of their income to basic consumption. As a result, even marginal increases in prices continue to push vulnerable populations further into poverty.

Structural Drivers of Rising Poverty

The World Bank attributes the high poverty rate to a combination of structural factors, including slow income growth, limited job creation, and persistent economic inequality.

Nigeria’s economic growth has not kept pace with population expansion, resulting in declining per capita income. At the same time, labour market challenges particularly in the informal sector have constrained income stability for millions of households.

Additionally, macroeconomic reforms, including fuel subsidy removal and exchange rate adjustments, have contributed to short-term cost pressures, further straining household finances.

Urban and Rural Disparities

The poverty burden remains unevenly distributed across regions. Rural areas continue to experience higher poverty rates due to limited access to infrastructure, markets, and economic opportunities.

However, urban centres are increasingly affected, as rising housing costs, transportation expenses, and food prices reduce disposable income. This trend is particularly evident in major cities such as Lagos and Abuja, where the cost of living has risen significantly over the past two years.

Implications for Housing and Social Stability

The rising poverty rate has direct implications for Nigeria’s housing sector. Affordability constraints are intensifying, with more households unable to meet rental obligations or access formal housing markets.

This dynamic contributes to the expansion of informal settlements and increases pressure on urban infrastructure. It also highlights the need for targeted housing policies that address affordability, particularly for low- and middle-income households.

Policy Considerations and Reform Priorities

The World Bank emphasises the need for policies that support inclusive growth, job creation, and social protection. Key recommendations include expanding targeted cash transfer programmes, improving access to basic services, and strengthening labour market opportunities.

Fiscal policy reforms aimed at improving revenue mobilisation and public spending efficiency will also be critical to addressing structural poverty challenges.

Outlook for the Nigerian Economy

While inflation moderation may provide some relief in the near term, sustained improvements in living standards will depend on broader economic reforms. These include enhancing productivity, supporting private sector growth, and investing in infrastructure and human capital.

For investors and policymakers, the rising poverty rate signals underlying demand constraints that could affect consumption-driven sectors, including housing and retail.

The World Bank’s assessment that 63% of Nigerians live in poverty highlights the depth of the country’s economic challenges. Despite a slowdown in inflation, structural issues continue to limit income growth and household welfare.

Addressing these challenges will require coordinated policy action focused on inclusive growth, job creation, and improved social protection systems. Without sustained intervention, rising poverty levels may continue to constrain Nigeria’s economic potential and social stability.

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