Nigeria economy stabilising but 139 million now live in poverty – World Bank

Nigeria’s economy is stabilising after a raft of reforms by President Bola Tinubu rocked the West African giant, the World Bank said Wednesday, but millions of citizens have fallen into poverty.

Tinubu, who came to power in 2023, has overseen sweeping reforms in the West African giant. While economists said they were long overdue, they have caused the cost of living to skyrocket.

Major reforms included liberalising the exchange rate and ending costly fuel subsidies.

The ensuing galloping inflation has since eased — helping prompt a rate cut by the central bank last month. Back in August, however, it stood at an eye-watering 20.1 per cent year-on-year.

Food inflation was “a major concern”, the World Bank’s bi-annual country development report said.

“Poor households — who spend up to 70 percent of their income on food — have seen the cost of a basic food basket rise fivefold between 2019 and 2024,” it noted.

It said about 61 percent of the country’s population — 139 million people — now live in poverty, rising from 40 percent, or 81 million people, in 2019.

Three-quarters of the increase occurred before 2023, it said, though it warned that gains from Nigeria’s economic reforms had yet to “translate into better living standards”.

– World Bank ‘cautiously optimistic’ –

The report was supportive of the reforms, saying they prevented “an outright fiscal crisis”.

The World Bank said its economic outlook of the West African giant remained “cautiously optimistic”, with growth expected to rise slightly from 4.2 percent in 2025 to 4.4 percent in 2027.

Nigeria’s economy grew by 3.9 percent in the first half of 2025, compared to 3.5 percent in the same period last year.

Foreign reserves have improved to just above $42 billion, the highest since 2019.

And the country’s debt-to-GDP ratio is expected to decline for the first time in a decade, from 42.9 percent to 39.8 percent.

“But macroeconomic stability alone is not enough,” Mathew Verghis, the World Bank’s Nigeria country director, said in a statement.

“The true measure of success will be how these reforms improve the daily lives of Nigerians — especially the poor and vulnerable.”

The country will begin a new tax administration at the start of next year. Officials say the new regime will expand the tax base and while at the same time easing the burden on low-income earners and small businesses.

Tinubu said last week in a televised address that the country’s economy had “finally turned the corner”.

AFP

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