Nigeria’s poverty rate rose to 63% in 2025, reflecting a widening gap between macroeconomic improvements and household welfare, even as inflation recorded a sharp slowdown, the World Bank has said.
The disclosure was contained in the Nigeria Development Update (April 2026) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” presented in Abuja.
According to the report, poverty increased steadily from 56% in 2023 to 61% in 2024, before rising further to 63% in 2025 — representing about 140 million Nigerians living below the poverty line.
The World Bank noted that the trend underscores weak transmission of economic gains to households, with incomes failing to keep pace with rising living costs.
“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.
The institution explained that although inflation has moderated significantly, the benefits have not yet translated into improved living standards due to the lingering impact of previous price surges.
It added that cumulative inflation shocks continue to erode real incomes, particularly among low-income households, limiting the effectiveness of recent disinflation in improving welfare conditions.
External shocks, including geopolitical tensions in the Middle East, were also cited as factors sustaining elevated energy, food, and transport costs, further worsening the cost-of-living burden.
Beyond inflation dynamics, the report highlighted structural weaknesses in Nigeria’s growth model as a key constraint to poverty reduction.
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It noted that economic expansion has been driven largely by services and industry, while agriculture—the sector employing the majority of poor Nigerians—has lagged behind.
“Growth in the agriculture sector—where more than half of the poor work—has lagged services and industry, constraining the pace of poverty reduction,” the World Bank said.
The report warned that this imbalance has weakened the link between national growth and improvements in living standards, particularly for vulnerable populations.
Looking ahead, the World Bank projected a gradual decline in poverty levels from 2026, assuming continued moderation in inflation and improved macroeconomic stability.
Poverty is expected to fall to about 59% by 2028, supported by easing food inflation and moderate economic growth.
However, the institution cautioned that progress could remain slow due to weak job creation, low agricultural productivity, and persistent inequality. It stressed that targeted reforms aimed at expanding employment opportunities and improving livelihoods would be critical to reversing current trends.
The report also highlighted the strong link between poverty and human capital development, noting that poorer households continue to experience worse outcomes in nutrition, healthcare, and early childhood development—factors that could reinforce long-term inequality if unaddressed.
The rise in poverty came despite a significant easing in inflation. Data from the National Bureau of Statistics (NBS) showed headline inflation dropped from 34.80% in December 2024 to 15.15% in December 2025, a decline of 19.65 percentage points.
Despite this improvement, the World Bank said the benefits have yet to reach households meaningfully, as earlier inflationary pressures had already significantly reduced purchasing power across the country.