Tapering Off World Bank’s Poverty Alarm

A fresh warning from the World Bank should jolt Nigeria’s policymakers into urgent action. According to the Bretton Woods institution, poverty in the country is projected to rise by 3.6 percentage points by 2027. This grim forecast, coming on the heels of prolonged economic turbulence, is not a random statistical estimate, it is an indictment of Nigeria’s repeated failure to convert its vast wealth into broad-based prosperity.

Released during the Spring Meetings of the International Monetary Fund and World Bank in Washington, D.C., the latest Africa’s Pulse report underscores the vulnerabilities facing resource-rich African nations. Nigeria, along with the Democratic Republic of Congo, was cited as a prime example of countries rich in natural resources yet failing to transform that wealth into tangible improvements in the quality of life for their citizens. Sub-Saharan Africa, where Nigeria plays a dominant role, is still home to 80 percent of the world’s 695 million extremely poor people as of 2024. The alarm is loud and clear: unless Nigeria changes course, the poverty crisis will worsen.

In a year when the Tinubu administration is pushing for economic transformation and aspiring to a $1 trillion economy, the warning couldn’t be more timely. Since the removal of the petrol subsidy in May 2023, government revenues have seen a noticeable increase. Yet the improved fiscal space has not translated to relief for ordinary Nigerians. Instead, the cost of living has skyrocketed. Inflation hovers above 24 percent. Electricity tariffs have surged. The cost of fuel has quadrupled. The naira has lost over 70 percent of its value due to the floating exchange rate policy. Real incomes are plummeting. Many Nigerians are losing their jobs or watching their purchasing power evaporate. Rather than feeling the benefits of economic reforms, millions are sinking deeper into poverty.

This disconnect between policy and impact is not new. Nigeria has worn the unfortunate crown of global poverty capital before. A 2018 report by the United Nations ranked Nigeria at the bottom, with 86.7 million people living below the global poverty line of $2.15 per day. In 2022, a collaborative study by the National Bureau of Statistics (NBS), UNICEF and UNDP revealed that 133 million Nigerians were living in multidimensional poverty, lacking not just income but also access to health, education, and basic infrastructure. By 2024, the World Bank had added another seven million Nigerians to the poverty tally, largely due to the twin policies of subsidy removal and naira floatation.

Yet even in the face of this humanitarian emergency, Nigeria’s political elite appear largely unbothered. While the masses bear the brunt of policy shocks, lawmakers and political appointees continue to enjoy extravagant allowances. The Tinubu government, which promised to slash the cost of governance, is instead running one of the most bloated federal cabinets in recent memory. The administration has also failed to act on the Steve Oronsaye Report, which recommended the merger or scrapping of redundant government agencies. This delay only reinforces the culture of waste that has characterized Nigeria’s public sector spending for decades.

The 2025 budget offers little comfort. Despite being the largest in nominal naira terms, it holds the least purchasing power of any federal budget since 2018, according to Nigerian Economic Society president Adeola Adenikinju. The federal structure remains highly centralized, concentrating fiscal and administrative powers in Abuja, while subnational governments remain largely unaccountable and underperforming.

The African Development Bank (AfDB) has repeatedly flagged the root causes of Nigeria’s poverty: poor governance, low investment in critical infrastructure, and neglect of productive sectors like agriculture and manufacturing. AfDB President Akinwumi Adesina has stressed that without reliable power and investment in innovation and technology, no real economic transformation can occur.

What is needed now is a break from the status quo. The World Bank’s advice is as straightforward as it is urgent: improve fiscal management, build a stronger social contract with citizens, and focus on inclusive economic development. This means redirecting public spending towards health, education, and infrastructure. It also means tackling corruption with real consequences, not just cosmetic anti-corruption drives.

The private sector must be empowered as the engine of growth. Government should focus on setting policy direction, not competing with the private sector. The frequent government interference in business, from ports operations to oil and gas pricing, has stifled innovation and driven away investment. The organised private sector has long advocated for deregulation, privatization, and the removal of bureaucratic bottlenecks. These are not new ideas, but they require political will to implement.

Nigeria must also embrace true fiscal federalism. The current unitary system concentrates too much power in the centre and leaves states and local governments with little incentive or capacity to develop their own economies. Giving states more control over their resources and responsibilities could stimulate grassroots development and reduce dependence on federal allocations. Without this structural reform, no amount of foreign aid or short-term economic tinkering will shift the poverty dial significantly.

There are examples to learn from. Argentina, once the poster child of economic chaos, has recently implemented painful but effective reforms: slashing public spending, curbing subsidies, devaluing its currency, and embracing market-driven policies. Nigeria may not replicate Argentina’s path wholesale, but the principle holds without tough decisions, there will be no meaningful change.

It is also time for Nigeria to rethink its development priorities. Large infrastructure projects are important, but not at the cost of basic needs. Building massive bridges or airports means little to the average Nigerian if there is no food on the table, no power in the home, and no job to earn a living. The development agenda must shift from elite-focused spending to people-centred investment.

As 2027 approaches, the stakes couldn’t be higher. Rising poverty is not just a statistic, it threatens national cohesion, fuels insecurity, and undermines democratic stability. Nigeria cannot afford to sleepwalk into another crisis. The warning signs are clear. The path to reversing the trend is not unknown. What remains to be seen is whether the Tinubu administration and other levels of government will act with the seriousness and urgency the situation demands.

The window for action is narrowing. Nigeria must choose now: Either continue with half-measures and endure the consequences, or embark on bold reforms that can truly lift millions out of poverty. The time to act is yesterday. But the next best time is now.

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