The World Bank warns that Nigeria’s worsening economic environment is pushing millions of people into poverty. In its “Macro Poverty Outlook for Nigeria: April 2023” brief, the bank notes that the country’s persistent fiscal deficit has deepened the public‑debt burden, with 96.3 % of government revenue devoted to debt service in 2022. The report states that the fiscal position deteriorated sharply: the cost of the petrol subsidy rose from 0.7 % to 2.3 % of GDP, low non‑oil revenues and high‑interest payments amplified fiscal pressure, and the fiscal deficit reached an estimated 5.0 % of GDP—well above the 3 % limit for the federal government. Consequently, public debt exceeded 38 % of GDP, and the debt‑service‑to‑revenue ratio climbed from 83.2 % in 2021 to 96.3 % in 2022.
The brief also links cash scarcity, created by the Central Bank of Nigeria’s naira redesign policy, to slower economic growth and reduced poverty‑reduction progress. It projects that about 13 million Nigerians will fall below the national poverty line between 2019 and 2025. Growth is expected to average only 2.9 % per year from 2023 to 2025—just above the 2.4 % population‑growth rate—and will be driven mainly by services, trade, and manufacturing, while oil production remains subdued due to inefficiencies and insecurity.
According to the World Bank, the macroeconomic environment has weakened since the 2021 oil‑price boom. Declining oil output, costly fuel subsidies, exchange‑rate distortions, and the monetisation of the fiscal deficit have eroded stability, leaving millions in poverty. Risks are tilted downward because of the absence of macro‑fiscal reforms, the naira demonetisation, and an uncertain external outlook. Multiple foreign‑exchange rates, high and rising inflation, mounting fiscal pressures, and dwindling forex reserves have further strained the economy.
Inflation has surged since 2019, especially for food items, eroding the purchasing power of the poor and vulnerable. In 2022, inflation averaged 18.8 %—a 21‑year high—and food‑price inflation alone pushed an estimated five million Nigerians into poverty. The bank also highlights that multiple FX windows, the central bank’s subsidised development financing, and fiscal‑deficit monetisation undermine the effectiveness of monetary policy.
Finally, the brief points to persistent structural problems that hinder growth: volatile output, low private investment, inefficient public spending due to weak revenue collection, and poor social‑development outcomes that depress productivity. Widespread insecurity and an increase in violent conflicts further damage private investment and economic expansion.
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