Breaking News: Economic Reforms Lead To Surge In Nigerians Below Poverty Line, Reaching 104 Million, According To World Bank Report

A recent World Bank report has highlighted a surge in Nigeria’s poverty levels, attributing it to recent economic and fiscal reforms. The removal of the petrol subsidy and the restructuring of the foreign exchange market rate were identified as key initiatives. Despite commending the Federal Government for these ‘bold reforms,’ the report emphasized the temporary pain experienced by the population, with 104 million Nigerians now living below the poverty line.

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The World Bank disclosed that the number of impoverished individuals in Nigeria rose from 95 million in 2021 to 100 million in 2022. In comparison, the Nigerian Bureau of Statistics reported figures of 82.9 million in 2019 and 85.2 million in 2020. The World Bank’s Nigeria Development Update urged the government to sustain the reform momentum, addressing the costs associated with the ongoing changes.

The report acknowledged the challenges posed by these reforms, with inflation reaching a record high of 27.3% Year-on-Year in October 2023, largely driven by the one-off price impacts of removing the gasoline subsidy. The volatile foreign exchange market and fluctuations in exchange rates were also highlighted. The World Bank emphasized the need for clarity on oil revenues, especially regarding the financial gains of the Nigeria National Petroleum Corporation Limited (NNPCL) from subsidy removal and its impact on Federation revenues.

Shubham Chaudhuri, the World Bank Country Director for Nigeria, praised the petrol subsidy and foreign exchange management reforms as positive steps but urged coordinated fiscal and monetary policy actions for sustainable results. He suggested that the economy could benefit from increased fiscal space for development spending in the medium term.

The report recommended specific actions to maximize the benefits of reforms, including controlling inflation, improving FX market stability, achieving fiscal consolidation, and addressing structural barriers to growth. It projected an average annual economic growth rate of 3.5% in 2023-2026 if reforms continued.

The World Bank called for transparency from the Nigerian National Petroleum Company Limited (NNPCL) in disclosing its financial statements and revenue inflows. The removal of the subsidy was expected to yield substantial fiscal savings, and the report emphasized the importance of scrutinizing NNPC’s accounts to ensure revenue flowed into government coffers.

Looking ahead, the report outlined the opportunity for Nigeria to achieve a more stable macroeconomic environment in 2024, potentially easing access to foreign exchange and imported inputs, thereby creating jobs and reducing poverty. The government’s commitment to salary reviews in 2024 and plans to address foreign currency liquidity were also highlighted. However, the Minister of Industry, Doris Uzoka-Anite, disagreed with the World Bank’s stance on power subsidies, asserting that supporting production in the power sector was essential.

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Source: Bushradiogist