The World Bank, in its Macro Poverty Outlook for Nigeria: April 2023, stated that about 13 million Nigerians would fall below the national poverty line by 2025. This, according to the Bretton Wood institution is due to the country’s population growth outpacing poverty reduction.
The National Bureau of Statistics (NBS) had, in its 2022 Multidimensional Poverty Index survey stated that 63 per cent of persons living within Nigeria (133 million people) are multi-dimensionally poor.
The World Bank report stated further, “With Nigeria’s population growth continuing to outpace poverty reduction, and persistent high inflation, the number of Nigerians living below the national poverty line will rise by 13 million between 2019 and 2025 in the baseline projection.”
Tracing the genesis of the current situation, the World Bank said “Macroeconomic stability has weakened considerably due to multiple FX rates, high and increasing inflation, rising fiscal pressures, and declining forex reserves. Nigeria’s fiscal position has deteriorated since 2015 due to declining oil revenues and rising expenditures, resulting in persistently high fiscal deficits. To finance the growing deficit, the government has resorted increasingly to costly financing from the central bank, which in turn has increased interest costs, crowding out private sector credit, and contributing to inflation.”
The report also showed that inflation, especially for food items, has been on the rise since 2019. This it stated had eroded the purchasing power of poor and vulnerable Nigerians and increasing poverty.
The World Bank said, “Inflation reached an annual average 18.8 per cent in 2022, a 21-year high. Food inflation in 2022 is estimated to have pushed five million Nigerians into poverty. The increase in inflation resulted from higher global commodity prices, the sharp depreciation of the parallel market exchange rate, floods that impacted several states, and the monetization of the fiscal deficit.”
It added, “The effectiveness of monetary policy is compromised by multiple FX windows, the central bank’s provision of development finance at subsidised rates, and monetisation of the fiscal deficit.