RISING inflation, escalating interest rates, and the depreciating value of the Naira could push an additional 13 million Nigerians below the national poverty line by 2025, according to a report by Pricewaterhouse Coopers (PwC) International Limited.
The report, titled: 2025 Nigerian Budget and Economic Outlook, released on the official website of PwC: www.pwc.com highlighted the deepening economic challenges facing Africa’s largest economy.
The national poverty line, as defined by the National Bureau of Statistics (NBS), represents the annual income threshold below which an individual is considered poor.
The report indicated that Nigeria’s economic environment, characterized by surging inflation and the rising cost of living, is exacerbating poverty levels, with far-reaching implications for the country’s population.
The PwC report predicted a significant increase in the number of Nigerians living in poverty, building on the findings of the 2022 National Multidimensional Poverty Index (MPI).
That report revealed that 133 million Nigerians, over 60 percent of the population, are multidimensionally poor—lacking access to basic necessities such as healthcare, education, employment, and adequate living standards.
In a subsequent 2024 update, the World Bank estimated that 129 million Nigerians live below the poverty line, reflecting a sharp rise from 40.1 percent of the population in 2018 to 56 percent by 2024.
The ongoing economic stagnation, compounded by rapid population growth, has intensified poverty levels. The sharp depreciation of Gross Domestic Product (GDP) per capita, which dropped by 25.04 percent from $2,162.6 in 2022 to $1,621.1 in 2023, further underscores the declining purchasing power and worsening living standards according to the PWC report.
Inflation has been a key driver of Nigeria’s economic crisis. By December 2024, the inflation rate surged to 34.8 percent, significantly eroding consumers’ purchasing power and making it increasingly difficult for Nigerians to afford essentials such as food, housing, and healthcare.
Between January and September 2024, food and transport inflation recorded the highest increases, with food inflation alone accounting for 34 percent of the month-on-month rise. Rising petroleum prices further contributed to escalating transportation costs.
The increase in food prices has led to severe food insecurity, with 25.1 million Nigerians acutely affected in 2024. The PwC report warned that this figure could rise to 33.1 million in 2025 if inflation persists, coupled with ongoing violence in Northern food-producing regions.
While the Nigerian government has implemented measures such as a minimum wage increase, only 4.1 percent of the working population has benefited, limiting its overall impact.
The report also highlighted gaps in the country’s social safety nets, such as conditional cash transfers to the most vulnerable households. These programs remained underfunded and poorly targeted, with limited authentication through National Identification Numbers (NINs) or Bank Verification Numbers (BVNs).
Stakeholders believe that projected rise in poverty underscores the urgency of addressing Nigeria’s economic challenges. Despite a modest GDP growth projection of 3.0 percent for 2024 and a stronger outlook for 2025, the recovery may not be sufficient to counteract the economic pressures of recent years. The report calls for more robust poverty alleviation measures, including targeted social interventions and structural reforms to address inflation and stimulate inclusive economic growth.
Without decisive action, the economic hardship faced by millions of Nigerians will only worsen, pushing more families into poverty and jeopardising the country’s long-term development prospects.
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