The World Bank expects poverty levels to rise in Nigeria, with an estimated increase of 3.6 percentage points by 2027.
The forecast is included in the bank’s African Pulse Report, which was released at the ongoing spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington, D.C.
The report shows that the prospect of poverty in Nigeria is frustrating, warning that despite the small extent of economic activity, especially in the non-oil sector in the second half of 2024, such as structural challenges such as excessive natural resources and national vulnerability, may hinder progress.
According to the World Bank, other resource-dependent, vulnerable countries will worsen poverty, unlike projected non-resource-rich countries that are expected to achieve faster poverty.
“Poverty in resource-rich, fragile countries, including large economies such as Nigeria and the Democratic Republic of the Congo, is expected to increase by 3.6 percentage points between 2022 and 2027,” the report said.
The bank noted that the extreme poverty rate in sub-Saharan Africa remains the highest in the world. In 2024, 80% of the world’s 695 million extreme poverty population live in the region, with only four countries accounting for only 560 million.
By comparison, South Asia accounts for 8% of the world’s extreme poor, East Asia and the Pacific, 5% of the Middle East and North Africa, and 3% of the Latin America and the Caribbean.
The report attributes the slow pace of poverty in resource-rich countries to falling oil prices and weak fiscal structures. In contrast, despite fiscal challenges, non-resource-rich countries still use high agricultural commodity prices to drive growth.
“This is a good model where the combination of resource wealth and fragility or conflict is associated with the highest poverty rate, accounting for 46% in 2024, 13 percentage points higher than non-risk, resource-rich countries,” the report added.
To address these challenges, the World Bank urges Nigeria and similar economies to strengthen fiscal management and establish more effective fiscal contracts with citizens, saying such reforms are crucial to promoting inclusive economic development and achieving sustainable poverty reduction.
