The World Bank has warned that poverty in Nigeria could worsen over the next two years. This warning comes even as the country’s economy shows signs of moderate growth.
Resource-Rich Countries Falling Behind
In its latest Africa Pulse report titled “Improving Governance and Delivering for People in Africa”, the World Bank compared the progress of non-resource-rich and resource-rich nations. While countries without natural resources are reducing poverty faster, resource-rich nations like Nigeria risk falling behind.
The report states that poverty in fragile, resource-dependent countries—including Nigeria and the Democratic Republic of Congo—may increase by 3.6 percentage points between 2022 and 2027.
Reforms Not Enough to Tackle Poverty
Over the past two years, the Nigerian government introduced various safety net programs to support citizens. However, these measures have not been enough to make a significant impact.
Recent economic reforms aimed at liberalizing the economy have led to mixed outcomes. Although these changes removed artificial controls and allowed the market to take the lead, they also caused a sharp rise in poverty. In one year, the number of Nigerians living in poverty jumped from 104 million to 129 million.
Nigeria Accounts for 19% of Sub-Saharan Africa’s Poor
The World Bank revealed that Nigeria now accounts for 19% of Sub-Saharan Africa’s total poverty. Following Nigeria are Congo with 14%, Ethiopia with 9%, and Sudan with 6%.
Despite this alarming figure, the Bank projects that Nigeria’s GDP will grow by 3.6% in 2025 and reach 3.8% by 2027.
What’s Driving the Growth?
According to the World Bank, Nigeria’s recovery will rely mainly on the services sector. Key drivers include finance, ICT, and transportation. A rebound in oil production could also support growth, especially as output aligns with OPEC+ quotas.
The World Bank’s forecast is slightly more optimistic than the IMF’s. The IMF recently cut Nigeria’s 2025 growth projection to 3.0%, citing weaker oil output and global economic tensions.
However, both predictions fall below Nigeria’s official target of 4.6% GDP growth as outlined in the 2025 budget.
Experts Call for Economic Diversification
Investment banker and economist, Adetilewa Adebajo, urged the Nigerian government to focus on diversification and infrastructure. He recommended the sale of joint venture oil and gas assets to optimize the government’s balance sheet.
Adebajo also suggested replicating projects like the Agro Airport and Olokola Deep Sea Port across the country. He pointed to the work of firms like Arise and Dangote as examples of large-scale infrastructure that could drive sustainable growth.