More Nigerians Will Become Poorer By 2027, Despite Economic Pockets of Progress - World Bank

 

World Bank Forecasts Poverty Spike in Nigeria as Structural Challenges Persist

Nigeria is bracing for a surge in poverty over the next five years, as the World Bank projects a 3.6 percentage point increase in poverty levels by 2027. This sobering forecast was revealed in the latest edition of Africa’s Pulse, a biannual economic update released during the ongoing Spring Meetings of the International Monetary Fund (IMF) and World Bank in Washington, D.C.

Despite pockets of economic improvement, especially outside the oil sector in late 2024, Nigeria’s path toward poverty reduction remains fraught with longstanding structural challenges. The World Bank’s report emphasizes that countries endowed with natural resources but plagued by institutional fragility—Nigeria among them—are on course to see deepening poverty, diverging from the broader trend seen in non-resource-rich countries within Sub-Saharan Africa.

Fragility, conflict, and economic dependence on volatile resources continue to undermine gains that could otherwise be made from sectors such as agriculture and services. Nigeria’s trajectory is shared by other large, resource-rich nations in the region, including the Democratic Republic of Congo. According to the report, both nations fall into a category where poverty rates are not only high but rising, largely due to poor fiscal management and a lack of economic diversification.

The World Bank warns that the average poverty rate in fragile, resource-dependent African countries could reach 46% in 2024. This figure starkly contrasts with non-fragile, resource-rich nations, which, though still facing challenges, report significantly lower average poverty rates—13 percentage points lower, to be exact.

Economic growth across Nigeria has been uneven. While the non-oil sector showed encouraging signs toward the end of 2024, these gains have not been sufficient to offset the broader socio-economic difficulties. The report attributes this disparity to declining oil prices and persistently weak fiscal institutions. Such conditions have stymied the capacity of the Nigerian government to translate growth into widespread poverty alleviation.

Across Sub-Saharan Africa, the scale of extreme poverty remains deeply concerning. The region houses 80% of the world’s extreme poor—roughly 556 million people out of a global total of 695 million in 2024. Alarmingly, just four countries in the region, including Nigeria, account for half of that figure. This concentration of poverty underscores the urgent need for policy shifts and international support to stem the tide.

Contrastingly, some of Nigeria’s regional peers with less reliance on resource wealth have managed to record faster progress in reducing poverty. Bolstered by elevated agricultural commodity prices, these countries have been able to maintain stronger economic growth even under fiscal constraints. The report notes that their success lies in a broader economic base and more resilient fiscal strategies.

As Nigeria continues to navigate a complex economic landscape, the World Bank is urging policymakers to take decisive action. Recommendations include overhauling fiscal frameworks to foster greater transparency and accountability, as well as building a more robust fiscal contract with citizens. By strengthening trust in public institutions and improving service delivery, Nigeria can lay the groundwork for more inclusive development and long-term poverty alleviation.

The idea of a “fiscal contract” between governments and citizens has been emphasized repeatedly in development discourse. In practical terms, it refers to the implicit understanding that governments will provide essential services and infrastructure in exchange for citizens’ compliance with taxation and civic duties. The World Bank argues that reinforcing this contract is particularly vital for countries like Nigeria, where governance challenges often erode public confidence and limit the effectiveness of social welfare initiatives.

Another pressing concern raised by the report is Nigeria’s overdependence on oil revenues, which are not only volatile but also subject to global pricing mechanisms far beyond the country’s control. As oil prices soften globally, Nigeria’s fiscal buffers have thinned, limiting the government’s ability to respond to shocks or invest in development projects that could uplift the poor.

Meanwhile, the country’s demographic pressures continue to mount. With a population projected to exceed 230 million, Nigeria faces increasing demand for jobs, healthcare, education, and infrastructure—all critical pillars in the fight against poverty. The widening gap between economic growth and social development, if left unchecked, could further destabilize an already precarious situation.

The World Bank's warnings are not without precedent. Analysts have long cautioned that unless Nigeria implements sweeping economic reforms, it risks squandering its potential and subjecting millions more to the grip of poverty. The current projections serve as a renewed call to action for the Nigerian government, civil society, and international partners to prioritize structural transformation and human development.

Efforts must also be made to tap into the country's vast human capital, encourage private sector investment, and strengthen institutions to ensure that economic growth is both inclusive and sustainable. Only by tackling these issues head-on can Nigeria reverse the projected upward trend in poverty and secure a more stable and prosperous future for its citizens.

The clock is ticking. Without meaningful change, the gap between the wealth of Nigeria’s resources and the well-being of its people will only continue to widen.