The PricewaterhouseCoopers International Limited has disclosed that additional 13 million Nigerians are at risk of being in the poverty net this year. In 2022, about 133 million Nigerians were said to be multidimensionally poor, according the National Bureau of Statistics (NBS). The figure represented about 63 per cent of Nigeria’s over 220 million people. The PwC International Ltd says the projected 13 million people will be in the national poverty line because of rising inflation, escalating interest rate and the depreciating value of the naira. National poverty line represents the annual income threshold below which an individual is considered very poor. The PwC new report entitled, “2025 Nigerian Budget and Economic Outlook”, highlighted the deepening challenges facing Nigeria’s economy.
The report also indicates that Nigeria’s economic environment, characterized by surging inflation and rising cost of living is worsening poverty levels with far-reaching implications for the citizens. The 2022 Multidimensional poverty survey noted that millions of Nigerians across the six geopolitical zones lacked access to basic necessities such as healthcare, education, employment, and adequate living standards. Nigeria’s poverty rate reached 38.9 per cent in 2023, with 87 million people living below national poverty line. In a subsequent update in 2024, the World Bank corroborated the NBS damning report. It stated that, at least 129 million Nigerians were living below poverty line, reflecting a sharp rise from 40.1 per cent of the population in 2018 to 56 per cent in 2024.
The latest report on extreme poverty level in Nigeria, exacerbated by current economic hardship, is not surprising. It has intensified, and stretched the purchasing power of consumers to its limits.
Statistics have shown that the depreciation of Nigeria’s Gross Domestic Product (GDP) per capita dropped by 25 per cent from $2,162 in 2022 to $1,621 in 2023, and below $1,000 in 2024, according to the PwC report. Inflation appears to be a key driver of Nigeria’s present economic crisis. The inflation rate for December 2024 was 34.88 per cent. It is expected to increase further when the January 2025 inflation rate is released.
The rising inflation has hampered the capacity of Nigerians buy essential food items and other consumables. Food inflation, for example, accounts for 34 per cent of the month-on-month rise. Prices of petroleum products, cooking gas, transport fares and electricity tariff, have escalated the cost of living. This has resulted in food insecurity across the country. Due to terrorist attacks, over 33 million people projected will be affected by food insecurity this year. Government’s poverty alleviation measures are not effective. For instance, the government’s conditional cash transfer to vulnerable households is not transparent. Government’s poverty reduction programmes have marred by corruption and nepotism.
Despite a GDP growth of 3 per cent in 2024 and a projected 3.5 per cent for 2025, the task to reduce poverty in the country has become very urgent. Poverty intervention programmes have not been able to address the problem. The economic reforms implemented so far are not sufficient to stimulate inclusive growth that will impact living conditions of Nigerians.
Without pragmatic measures, the current economic hardship will jeopardize government’s long-term development prospects, and cause social unrest.
Therefore, concrete structural reforms are needed to lift millions of Nigerians out of poverty hole. Such reforms should address Nigeria’s current sluggish growth, low human capital, labour market weakness, and exposure to domestic and external shocks. The 2022 World Bank’s assessment report identified these as some of the problems vitiated government’s attempts to eradicate poverty.
The World Bank’s report came from the 2018/2019 Nigerian Living Standards Survey (NLSS), which provided Nigeria’s first official poverty numbers in a decade. Beyond these measures, we advise the government to deepen its macroeconomic reforms, including fiscal, trade and exchange rate policies, as well as other policies that will boost the productivity of farm and non-farm household enterprises.
These include, improving access to electricity, water and sanitation, information and communication technologies. There is no doubt that seamless implementation of the reforms will diversify the economy, invigorate structural transformation, create more jobs and support social protection programmes that will alleviate poverty.