14 Million More Nigerians Pushed into Poverty in 2024 Due to Stagnant Labor Incomes – World Bank Report

14 Million More Nigerians Pushed into Poverty in 2024 Due to Stagnant Labor Incomes – World Bank Report

 

14 Million More Nigerians Pushed into Poverty in 2024 Due to Stagnant Labor Incomes – World Bank Report

In 2024, stagnant labor incomes have forced an additional 14 million Nigerians into poverty, according to a recent report by the World Bank titled Macro Poverty Outlook: Country-by-Country Analysis and Projections for the Developing World. The report reveals that nearly 47% of Nigerians are now living below the international poverty line of $2.15 per day, highlighting the severe economic pressures and rapid population growth that are straining the nation's resources.

Rising Poverty Rates Amid Economic Struggles

The World Bank's report underscores the impact of Nigeria’s weak labor incomes on the rising poverty rate. It notes, "Labor incomes have not kept pace, pushing an additional 14 million Nigerians into poverty in 2024. An estimated 47% of Nigerians now live in poverty (or below the international poverty line of US$2.15 2017 PPP)."

The poverty crisis has been exacerbated by Nigeria's rapidly growing population, double-digit inflation, and economic challenges. Despite efforts to stabilize the macroeconomy, the country’s growth has lagged behind its population increase, worsening poverty levels.

Government Response: Cash Assistance Programs

In response to the rising poverty levels, the Nigerian government has launched cash assistance programs aimed at supporting vulnerable households. Around 15 million households, comprising approximately 67 million individuals, are slated to receive cash transfers totaling N75,000 across three installments. This initiative is part of the government’s effort to alleviate the effects of poverty in the short term.

However, despite these efforts, the World Bank warns that poverty in Nigeria could rise even further. The report projects that without intensified economic reforms, poverty levels could reach 52% by 2026. "Poverty is estimated at 52% in 2026," the report states, urging the Nigerian government to focus on reforms that protect the poorest citizens from inflation and create more productive job opportunities.

The Need for Economic Reforms

While the Central Bank of Nigeria (CBN) has taken steps to curb inflation by raising the monetary policy rate by 850 basis points between February and September 2024 and increasing the cash reserve ratio, these measures have not fully restored Nigerians' purchasing power. The World Bank report notes that monetary policy alone cannot solve the deeper issues underlying Nigeria's poverty crisis.

“While macro stabilization is essential and currently underway, by itself it is insufficient to enable Nigeria to reach its growth potential. Sustained efforts and the establishment of a credible track record are necessary to achieve sustained progress,” the report notes. It stresses that macroeconomic stabilization is a necessary but insufficient step toward addressing the country's long-standing economic challenges.

The report emphasizes the urgent need for reforms that address the structural constraints holding back Nigeria’s economy, including low productivity, weak labor markets, and insufficient economic diversification. Economic growth must outpace population growth to alleviate poverty, the World Bank argues, and this will require both macroeconomic stability and long-term reforms.

Inflation and Its Impact on Earnings

The ongoing inflation in Nigeria has severely eroded workers' earnings, making it harder for them to meet basic needs despite being employed. In a previous report, the World Bank estimated that rising inflation and stagnant wages had already pushed 10 million Nigerians into poverty by 2023. The situation remains grim, as many workers remain trapped in low-wage, low-skilled jobs, unable to escape the cycle of poverty.

According to the World Bank, about 34.3% of Nigerian workers aged 15 and older are classified as "working poor" – individuals who are employed but still live below the poverty line due to inadequate wages. This reflects the country's broader structural issues, including a lack of high-paying jobs and limited opportunities for upward mobility.

The Path Forward

The World Bank report highlights the need for a comprehensive approach to economic reform. It calls on Nigeria’s government to implement policies that not only stabilize the economy but also foster inclusive growth. The report suggests that reforms should focus on boosting labor productivity, creating better job opportunities, and protecting the most vulnerable from inflationary pressures.

Without these efforts, Nigeria's poverty crisis is likely to worsen, affecting millions more in the coming years. The World Bank stresses that only through sustained, inclusive economic growth can Nigeria lift its people out of poverty and build a more resilient economy.

Key Takeaways

  • 14 million more Nigerians fell into poverty in 2024 due to stagnant labor incomes, with nearly 47% of the population living below the international poverty line of $2.15 per day.
  • The Nigerian government has introduced cash assistance programs targeting 15 million households to alleviate poverty, but these measures may not be enough to curb rising poverty levels.
  • The World Bank projects poverty will reach 52% by 2026 if reforms to improve job opportunities and protect against inflation are not implemented.
  • Despite the Central Bank of Nigeria's efforts to stabilize the economy, inflation continues to erode purchasing power, pushing more Nigerians into poverty.
  • Long-term economic reforms focused on increasing productivity, improving job quality, and addressing structural constraints are essential for Nigeria to achieve sustainable growth and reduce poverty.

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