More Nigerians Will Become Poor by 2027 — World Bank

In a concerning forecast, the World Bank has projected that the number of people living in poverty in Nigeria will increase by three percentage points by 2027. This projection, outlined in the bank’s Africa Pulse report, was released during the ongoing Spring Meetings of the IMF and World Bank in Washington DC.

The report highlighted several factors contributing to this bleak outlook, including Nigeria’s reliance on natural resources and its fragile economic structure. While the country has shown some positive economic growth, particularly in the non-oil sector during the final quarter of 2024, the report warns that these gains will not be enough to counteract the long-standing challenges Nigeria faces. These challenges are exacerbated by its dependence on oil and the broader issues of economic fragility, which are expected to drive up poverty levels.

The World Bank’s report also placed Nigeria among a troubling group of resource-rich, fragile countries, which are expected to see an increase in poverty rates over the next few years. Specifically, poverty in these countries, including Nigeria, is projected to rise by 3.6 percentage points between 2022 and 2027, making them the only group in Sub-Saharan Africa with an expected increase in poverty.

Globally, Sub-Saharan Africa continues to bear the brunt of extreme poverty, with around 80% of the world’s 695 million extreme poor living in the region in 2024. Within Sub-Saharan Africa, four countries, including Nigeria, are home to half of the extreme poor. The report contrasts the situation in resource-rich, fragile countries like Nigeria with non-resource-rich countries, which have been able to reduce poverty more effectively. These non-resource-rich nations are benefiting from higher agricultural commodity prices, which have spurred growth despite fiscal challenges, while resource-rich countries like Nigeria are expected to struggle due to the slowdown in oil prices.

The World Bank also highlighted the dangerous combination of resource wealth and economic fragility, which often leads to higher poverty rates. The average poverty rate in these fragile, resource-rich nations is expected to be 46% in 2024, significantly higher than in non-fragile, resource-rich countries.

To reverse this trend, the report emphasizes the need for Nigeria and similar nations to improve fiscal management and establish stronger fiscal contracts with their citizens. Only through effective governance reforms and inclusive economic policies will Nigeria be able to tackle the escalating poverty crisis and secure long-term economic stability.