Economic Reforms Deepen Poverty Woes: World Bank Reports 104 Million Nigerians Below Poverty Line

A recent World Bank report has unveiled a concerning surge in Nigeria’s poverty levels, attributing the rise to the nation’s recent economic and fiscal reforms. These reforms notably include the removal of the petrol subsidy and restructuring of the foreign exchange market rate.

Despite acknowledging the Federal Government’s efforts as ‘bold reforms’ aimed at preventing a fiscal crisis, the World Bank cautioned that the current hardships are temporary but have significantly escalated the cost of living, forcing 104 million Nigerians below the poverty line.

The report highlights a steady increase in poverty figures, noting that the number of poor individuals in Nigeria rose from 95 million in 2021 to 100 million in 2022. The Nigerian Bureau of Statistics had reported 82.9 million in 2019 and 85.2 million in 2020.

In its Nigeria Development Update, titled ‘Turning the Corner: Time to Move From Reforms to Results,’ the World Bank emphasizes the importance of sustaining reform momentum and addressing the associated costs. The report calls for clarity on oil revenues, especially from the Nigeria National Petroleum Corporation Limited (NNPCL), in the wake of subsidy removal.

Shubham Chaudhuri, World Bank Country Director for Nigeria, underscores the necessity for coordinated fiscal and monetary policy actions, stating that continued reform implementation could pave the way for enhanced fiscal space and economic growth.

The report recommends actions such as controlling inflation, improving FX market stability, achieving fiscal consolidation, and addressing structural barriers to growth. It anticipates an average annual growth rate of 3.5% in 2023-2026 with ongoing reforms.

As questions arise about the NNPCL’s finances, the World Bank urges transparency and calls for the release of the company’s Statement of Accounts. Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, insists on scrutinizing NNPCL’s accounts, emphasizing the need for revenue transparency.

Additionally, Edun reveals plans for a salary review in 2024 and addresses the issue of wealthy Nigerians holding substantial amounts in foreign currencies in their Domiciliary accounts. The government plans to incentivize the release of these funds for investment.

Despite disagreements on power sector subsidies, the World Bank remains cautiously optimistic about Nigeria’s economic recovery, emphasizing the ongoing implementation of policies as key to navigating the challenging landscape.