Insight & Analysis - November 15, 2021

Nigeria’s Poverty Profile is Deeply Worrisome

The World Bank estimates that 90 million Nigerians will be poor by 2022.

November 15, 2021

3 min read

The Nigerian National Bureau of Statistics disclosed in 2020 that 40% or 83 million Nigerians languish in poverty. While we’re yet to see Nigeria’s poverty profile for 2021, it is projected that the number of poor people in the country will be up to 45% or 90 Million in 2022.

Every day, Nigerians live in the harsh economic reality crafted by government policies. In a recent Annual World Bank Group and IMF Meeting held by the Standard Bank Research Group, it was stated that Nigeria has one of the highest levels of inflation but the causes differ from the rest of the world. They blamed the increased rate at which Nigerians are falling into poverty on border closure and food inflation.

“Closed borders on Aug 19 caused inflation to shoot up, mainly driven by food inflation and, while inflation has been trending lower since Mar 21, it remains high due to FX liquidity difficulties, supply chain disruptions, and insecurity”.

While the acceptable inflation rate is 2% or less, Nigeria’s inflation rate is at 16.63% despite a fall from 17.01% recorded some months back. Nigeria is a country critically in need of a way out. According to the World Bank Nigeria Development Update (NDU) titled “Resilience through Reforms”. The NDU acknowledges the government’s policy reforms aimed at minimising the impact of the crisis and promoting recovery, including actions made to reduce fuel subsidies and modify electricity rates to more cost-reflective levels, both of which are aimed at increasing budgetary capacity for pro-poor expenditures.

Despite a more favourable external environment, with rising oil prices and growth in advanced economies, the report warns that failure to maintain and deepen reforms would jeopardise macroeconomic stability and policy credibility. Adding that this will limit the government’s ability to address gaps in human and physical capital, which are required to attract private investment.