The World Bank has said that the federal government’s safety nets for poor Nigerians could suffer due to declining oil prices.
In its Africa Pulse report entitled ‘Improving Governance and Delivering for People in Africa’, published on Friday, it said that the safety nets targeted at easing the burden of the citizens may not be enough to lift millions off the poverty line.
According to the World Bank, Nigeria accounts for 19 per cent of the share of poverty in Sub-Saharan Africa, followed by Congo, Ethiopia and Sudan with 14 per cent, nine per cent and six per cent, respectively.
The report follows the Bola Tinubu administration’s economic reforms upon assumption of office.
Reforms such as the petrol subsidy removal and the foreign exchange (FX) market liberalisation have exacerbated inflation and poverty rates, with the number of poor people rising from 104 million to 129 million people in a year.
The multilateral bank predicted that Nigeria may likely see a further rise in the levels of poverty over the next two years despite a moderate economic growth forecast.
While non-resource-rich countries are expected to continue reducing poverty and grow faster, it noted that resource-rich countries like Nigeria may be dragged down due to declining oil prices.
“Resource-rich countries are expected to see less progress in terms of poverty reduction,” the World Bank said.
“Importantly, poverty in resource-rich, fragile countries (which include large countries like the Democratic Republic of Congo and Nigeria) is expected to increase by 3.6 percentage points over 2022–27,” it added.
The Washington-based lender, however, said it expects the country’s annual GDP to increase by 3.6 per cent in 2025 and 3.8 per cent in two years.
“Economic growth is expected to remain moderate in Nigeria,” the World Bank said.
“It is expected to increase from 3.4 per cent in 2024 to 3.6 per cent in 2025, and slightly increase to 3.8 per cent in 2026–2027.”
It said the gradual recovery of the Nigerian economy along the forecast horizon is driven primarily by the service sector, specifically, finance, information and communications technology services, and transportation, and, to a lesser extent, a rebound in oil production that converges to its OPEC+ quota.
The World Bank’s projection follows the International Monetary Fund (IMF) revised forecast for the nation.
Citing weakening oil supply and escalating global trade tensions, the IMF cut Nigeria’s 2025 economic growth forecast downward to 3.0 per cent from the earlier projection of 3.4 per cent in 2024.
