79% of Nigerians Still Poor or Vulnerable Despite Economic Reforms - World Bank

Despite nearly three years of sweeping economic reforms by the Federal Government, about 79 per cent of Nigerians remain poor or vulnerable to slipping into poverty, according to new World Bank documents that paint a sobering picture of the country’s social and economic realities.

The findings are contained in the World Bank’s newly approved Country Partnership Framework (CPF) for Nigeria (2026–2032) and its accompanying Streamlined Country Diagnostic (SCD), which outline the institution’s strategy for supporting Nigeria over the next seven years.

According to the report, while the Federal Government’s recent macroeconomic reforms have helped stabilise the economy and restore investor confidence, they have yet to translate into meaningful improvements in the living conditions of most Nigerians.

The World Bank stated that 33 per cent of Nigerians are classified as ultra-poor, while 61 per cent live below the national poverty line. It further noted that 79 per cent of the population is either poor or vulnerable to falling back into poverty.

The report stated: “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”

According to the diagnostic, approximately 139 million Nigerians currently live below the national poverty line, with poverty disproportionately concentrated in the northern part of the country.

The report further revealed that more than 86 million Nigerians lack access to electricity, while between three and four million young people enter the labour market every year, despite limited employment opportunities.

The World Bank attributed Nigeria’s prolonged economic difficulties to years of structural weaknesses, policy inconsistencies, overdependence on crude oil and repeated external shocks.

However, it acknowledged that recent reforms introduced by President Bola Tinubu’s administration—including the removal of petrol subsidy, exchange rate liberalisation, tighter monetary policy and ongoing tax reforms—have begun to improve key macroeconomic indicators.

According to the report, Nigeria’s economic growth rose from 3.5 per cent in the first half of 2024 to 3.9 per cent during the same period in 2025, foreign reserves climbed above $42 billion, fiscal deficits narrowed and investor confidence improved.

Despite these gains, the World Bank warned that persistently high inflation continues to erode household incomes and offset the benefits of economic reforms.

It stated: “High inflation, though declining, continues to erode real incomes, particularly for the poor. Social protection efforts to support the most vulnerable have been slow and uneven in their rollout.”

The institution added that while the reforms prevented Nigeria from sliding into a more severe economic crisis, structural and institutional challenges remain significant.

The report noted: “Despite recent bold reforms stabilising the economy and laying the groundwork for the Renewed Hope Agenda, significant structural challenges remain.”

It stressed that sustained macroeconomic, fiscal and structural reforms would be necessary to reduce inflation, expand fiscal space and ensure that economic stability ultimately translates into improved living standards.

The World Bank also identified job creation as the most critical pathway to lifting millions of Nigerians out of poverty.

Drawing lessons from countries such as India, Indonesia and China, the Bank argued that productive employment remains the most effective instrument for sustainable poverty reduction.

Under its new Country Partnership Framework, the World Bank plans to support labour-intensive sectors, particularly agriculture and micro, small and medium enterprises (MSMEs), while addressing longstanding deficiencies in electricity supply, digital infrastructure, education and healthcare.

The report stated that the strategy would support “an agile social transfer system to accelerate poverty exit and prevent backsliding during crises.”

It added that interventions would particularly target vulnerable regions, especially northern Nigeria, through expanded agricultural programmes, livelihood support, MSME financing and measures aimed at strengthening resilience against economic and climate-related shocks.

The Bank warned that reforms alone would not significantly reduce poverty unless they generate employment on a massive scale.

According to the report, one in every four Nigerian youths is neither employed, in education nor training, while only about 14 per cent of employed Nigerians hold regular wage-paying jobs, with the majority working in low-income informal activities.

The report projected that approximately 60 million young Nigerians would enter the labour market over the next decade, making employment generation Nigeria’s most urgent development challenge.

The World Bank also expressed concern over Nigeria’s weak social protection system.

It observed that public expenditure on social protection accounted for only 0.14 per cent of Gross Domestic Product (GDP) in 2021, while only 8.5 per cent of poor Nigerians were covered by any form of social safety programme.

The report recommended that as ongoing reforms create additional fiscal space, greater resources should be directed towards the country’s ultra-poor population.

To strengthen social safety nets, the Bank said it would support Nigeria in developing a unified, better-targeted and domestically financed social protection system.

Drawing from successful models in Brazil, Pakistan, Indonesia and India, the proposed framework seeks differentiated support for the ultra-poor, poor and near-poor, alongside expansion of the national social registry, digital identity infrastructure and digital payment systems.

According to the report, the interventions are expected to expand social protection coverage to about 41 million beneficiaries.

The World Bank further emphasised that employment alone would not immediately eliminate poverty because many Nigerians already in work remain poor due to low productivity and poor earnings.

It noted that social protection programmes remain heavily dependent on donor financing and should be complemented by greater investments in education, healthcare, nutrition and skills development to improve productivity and long-term incomes.

The report also linked Nigeria’s poverty challenge to weak human capital development.

It warned that 84 per cent of Nigerian children aged between five and 14 years cannot read age-appropriate texts, despite years of schooling, while childhood stunting continues to fuel intergenerational poverty.

Consequently, the framework proposes increased investments in nutrition, early childhood development, sanitation, household food security and education, targeting an eight-percentage-point reduction in stunting among children under five during the CPF implementation period.

Reviewing the previous 2021–2025 Country Partnership Framework, the World Bank acknowledged that poverty worsened during the period as Nigeria battled the COVID-19 pandemic, high inflation, fuel subsidies, exchange rate distortions and worsening insecurity.

Although the implementation of the previous framework was rated “Moderately Satisfactory,” the review noted that inflation significantly deepened hardship across the country.

It stated: “A national cash transfer program supported by the World Bank was designed to protect the poor and vulnerable from these shocks, but rollout has been slower than anticipated.”

According to the review, about 8.1 million households have received at least one payment under the national cash transfer programme, while another World Bank-supported resilience initiative reached more than 15 million Nigerians through social safety nets, livelihood support, food security interventions and financial assistance for businesses, including women-owned enterprises.

Meanwhile, the World Bank recently approved a fresh $1.25 billion loan for Nigeria under the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) programme.

The financing forms part of the institution’s new Country Partnership Framework aimed at creating jobs by unlocking private sector-led growth.

Announcing the framework, the World Bank stated: “The World Bank Group has endorsed a new Country Partnership Framework for Nigeria spanning 2026–2032, setting out a strategy to create more and better jobs at scale by unlocking private sector-led growth.”

The World Bank Country Director for Nigeria, Mathew Verghis, said the institution would focus on helping Nigeria convert recent macroeconomic gains into tangible improvements in living standards.

He said: “Our new Country Partnership Framework provides the strategy for how the World Bank Group will support Nigeria over the coming years, with a strong focus on helping to create more and better jobs, particularly by enabling private sector-led growth.

“The recent macroeconomic gains have been critical to help stabilise the economy. Translating improved macroeconomic conditions into better living standards will require addressing the structural constraints to spur private sector investment and job creation.”

The World Bank concluded that preserving the current reform momentum, accelerating private investment, strengthening governance and creating productive jobs would determine whether Nigeria succeeds in lifting millions of its citizens out of poverty.