The level of poverty in Nigeria could wow you when you ask someone for urgent 2k (2,000 Naira).
Indeed, there are varying categories of poverty foisted on the people of Nigeria. Sadly, they did not push themselves into this situation.
The World Bank in its latest report confirmed that some policies adopted by the Federal government pushed about four million citizens into different categories of poverty.
In its Nigerian Development Update (NDU) 2023, the World Bank described the country’s inflation rate as one of the highest globally, a situation it said pushed more people into poverty between January and May 2023.
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The report was launched on Tuesday, June 27 in Abuja.
Poverty In Nigeria Has Increased
According to the World Bank, if the Federal Government failed to provide palliatives for about 7.1 million Nigerians, they would become poorer.
The World Bank data revealed that 89.8 million Nigerians were poor as of the beginning of this 2023, but it rose to 93.8 million with the additional four million that became poor between January and May this year.
Poverty in Nigeria has been projected to soar further to 100.9 million if the government failed to compensate vulnerable citizens for fuel subsidy removal.
The report read: “Consumer price inflation has surged and is currently one of the highest globally, which is related to Nigeria’s fiscal imbalance and points to the urgency of reform efforts.”
“Inflation in Nigeria has been high for many years due to structural factors, but it escalated in 2022 to the point where consumer prices increased at their fastest pace for 17 years”.
The report also noted that consumer price index further accelerated in 2023 through May by 22.4% year-on-year.
Inflation was also driven by the monetisation of the fiscal deficit by the CBN, multiple exchange rates and exchange rate depreciation in the parallel market, and intensified trade restrictions, exacerbated by the spike in global food and energy prices.
“The CBN implemented measures to control rising inflation, including raising the monetary policy rate by 700 basis points, but these proved ineffective, and monetary policy remained loose overall in the first half of the year.
“The loss of purchasing power from high inflation has increased poverty in the short-term, pushing an estimated four million Nigerians into poverty between January and May 2023.”
133 Million Nigerians Are Multi-dimensionally Poor
The National Bureau of Statistics (NBS) recently disclosed that inflation in the country rose to 22.41% in May, which is the highest in about 19 years.
Also, the NBS, in its National Multidimensional Poverty Index (MPI) report, disclosed that 133 million Nigerians were multi-dimensionally poor.
The NBS said 63% of Nigerians were poor due to a lack of access to health, education, living standards, employment, and security.
In its new report, the World Bank noted that the loss of purchasing power increased the poverty headcount rate by an estimated 2 percentage points, or the four million people.
The World Bank added that the number of poor people in rural areas increased, while in urban settings, there was an estimated increase of 11%.
Again, the report explains: “In the immediate term, the removal of the petrol subsidy has caused an increase in prices, adversely affecting poor and economically insecure Nigerian households. Petrol prices appear to have almost tripled following the subsidy removal.
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“The poor and economically insecure households, who directly purchase and use petrol, as well as those that indirectly consume petrol, are adversely affected by the price increase.
“Among the poor and economically insecure, 38% own a motorcycle and 23% own a generator that depends on petrol. Many more use petrol- dependent transportation.
“The poor and economically insecure households will face an equivalent income loss of ₦5,700 per month”.
The World Bank warned that many newly poor and economically insecure households would likely resort to consequential coping mechanisms.
“Such families would not be able to send their children to school, or afford proper healthcare.”
The Bank stressed the need for adequate compensation, noting that compensating transfers would shield Nigerian households from the impacts of the subsidy reform.
The lending institution further applauded the removal of the subsidy and foreign exchange management reforms, which it maintained were crucial measures in rebuilding fiscal space and restore macroeconomic stability.
