Daniel Otera
The World Bank’s Nigeria Development Update for October 2025 provides a two-sided view of the country’s economic future. On the optimistic side, the report projects that Nigeria’s Gross Domestic Product (GDP) growth will accelerate to 4.4% by 2027, up from 4.2% in 2025. This growth is supported by a rise in foreign reserves, which are expected to exceed $42 billion. Additionally, Nigeria’s public debt is forecasted to reduce to 39.8% of GDP during this period.
However, the report also highlights significant challenges. Despite the positive macroeconomic indicators, poverty is expected to continue affecting a large portion of the population. The World Bank estimates that 130 million Nigerians will live in poverty in 2025, an increase from 87 million in 2019. This number is projected to peak at 133 million in 2026 before slightly easing to 131 million by 2027.
This stark contrast between economic growth and rising poverty underscores the complex nature of Nigeria’s recovery. While recent reforms such as changes to exchange rates and the removal of fuel subsidies have restored macroeconomic balance, the benefits have yet to reach the majority of households. This highlights ongoing hardships for much of the population.
The report, titled From Policy to People: Bringing the Reform Gains Home, credits the Tinubu administration’s moves since 2023 for these stabilizing effects. Gross Domestic Product (GDP) grew by 3.9% in the first half of 2025, compared to 3.5% in the same period of 2024, with services contributing 2.5 percentage points, non-oil industry 1.5 points, oil 1.0 point, and agriculture 0.5 point.
Federation Account Allocation Committee revenues climbed to 9.5% of GDP in the first eight months of 2025, from 7.6% in the same period last year, thanks to better tax collection, gains from subsidy removal, and higher oil output.
Non-oil revenues alone reached 16.24 trillion naira, or 5.7% of GDP, while oil and gas brought in 10.74 trillion naira, or 3.8%.
The current account surplus is set to stay above 6% of GDP through 2027, supported by falling imports and rising non-oil exports.
These figures build on National Bureau of Statistics data showing non-oil sectors—accounting for 95.95% of GDP—expanding by 3.64% year-on-year in the second quarter of 2025, up from 3.26% in 2024. Agriculture grew 2.82% in that quarter, contributing 21.04% to nominal GDP, while services such as information and communication technology led overall expansion. Industrial activity hit 7.45% growth, driven by manufacturing and construction. Total exports stood at 20.6 trillion naira in the first quarter, up 7.42% year-on-year, with agricultural exports surging 65% to 1.7 trillion naira due to stronger cocoa, sesame, and cashew shipments. By the second quarter, those exports rose another 29% to 1.3 trillion naira, helping the trade surplus expand 44.3% to 7.46 trillion naira. Non-oil exports now make up 18% of total exports, compared to 12% in 2023, according to International Monetary Fund data, buffering against oil price dips. Brent crude averaged $82 per barrel in early 2025, down 5% from 2024.
Yet the report stresses that these advances mask deepening inequality and hardship. The national poverty rate, based on the national poverty line, climbed to 61% in 2025 from 40% in 2019, using data from the National Living Standards Survey of 2018-19 and 2022-23.
This translates to 130 million people below the poverty line, with ultra-poverty a stricter measure affecting 36 million.
Food inflation, which hits the poor hardest, rose five times faster than in peer countries from 2020 to 2024. The consumer price index for food consumed by low-income households jumped significantly from a 2016 base of 100 to much higher levels by 2024.
The Gini coefficient improved slightly to 33.9 in 2022-23 from 35.1 in 2018-19, but rural poverty remains at 75.5% in 2024, versus 23% in urban areas, where services growth has boosted incomes by 12% year-on-year since 2023. Urban digital jobs in places like Lagos grew 18% annually, while rural farmers access only 8% formal credit, compared to 35% in urban areas.
World Bank Country Director for Nigeria, Mathew Verghis, addressed this gap at the report’s launch on October 8, 2025. “Over the last two years, Nigeria has commendably implemented bold reforms, notably around the exchange rate and the petrol subsidy. These are the foundations on which the country has the opportunity to build a program that can transform its economic trajectory,” he said.
He added, “These results are exactly what you need to see in a stabilization phase. These are big achievements, and many countries would envy them.”
But he cautioned, “Despite these stabilization gains, many households are still struggling with eroded purchasing power. Poverty, which began to rise in 2019 due to policy missteps and external shocks such as COVID-19, has continued to increase even after the reforms. In 2025, we estimate that 139 million Nigerians live in poverty.”
The Presidency quickly pushed back against the 139 million figure, calling it “unrealistic” and not reflective of local conditions. President Bola Tinubu’s Special Adviser on Media and Publicity, Sunday Dare, posted on X that the number “must be properly contextualized” within global poverty lines.
“While Nigeria values its partnership with the World Bank and appreciates its contributions to policy analysis, the figure quoted must be properly contextualized. It is unrealistic,” Dare said.
The statement explained that the estimate uses a 2017 purchasing power parity line of $2.15 per day, which equals about 100,000 naira monthly at current rates, above the new 70,000 naira minimum wage.
“There must be caution against interpreting the World Bank’s numbers as a literal, real-time headcount. The estimate is derived from the global poverty line of $2.15 per person per day, a benchmark set in 2017 Purchasing Power Parity terms. If converted nominally, that figure equals about $64.5 per month, or nearly N100,000 at today’s exchange rate, well above Nigeria’s new minimum wage of N70,000. Clearly, the measure is an analytical construct, not a direct reflection of local income realities,” it read.
Dare noted that poverty assessments rely on 2018-19 consumption data, missing the informal economy that supports millions. “Poverty assessment under PPP methodology uses historical consumption data (Nigeria’s last major survey was in 2018/19) and often overlooks the informal and subsistence economies that sustain millions of households. The government, therefore, regards the figure as a modelled global estimate, not an empirical representation of conditions in 2025. What truly matters is the trajectory, and Nigeria’s is now one of recovery and inclusive reform,” he added.
The administration pointed to expanded welfare efforts as evidence of progress. These include conditional cash transfers reaching 15 million households with 297 billion naira disbursed since 2023 via the National Social Register; the Renewed Hope Ward Development Program targeting all 8,809 wards for micro-infrastructure and services; strengthened National Social Investment Programs like N-Power, GEEP micro-loans (TraderMoni, MarketMoni, FarmerMoni), and Home-Grown School Feeding; food security measures with subsidized grains, fertilizers, mechanization, and revived reserves; the Renewed Hope Infrastructure Fund for energy, roads, and housing; and the National Credit Guarantee Company for credit to small businesses, women, and youth.
The statement described reforms like subsidy removal and exchange unification as “painful but necessary choices” to fix structural issues. “Even the World Bank itself has acknowledged that these reforms are already restoring macroeconomic stability and growth momentum,” it said, citing the lender’s praise.
Priorities now focus on translating stability into lower food prices, jobs, and infrastructure, with investments in agriculture, manufacturing, and power, including gas-to-power projects and skill hubs.
“Nigerians should begin to feel more visible improvements in food prices, income, and purchasing power as these programs mature,” the Presidency said.
It is also integrating welfare under a unified framework for better targeting, expanding the National Social Register to leave no community behind.
“Nigeria rejects exaggerated statistical interpretations detached from local realities. The government remains focused on empowering households, expanding opportunity, and laying the foundation for a fairer, more prosperous nation,” Dare concluded.
Reactions from opposition and experts underscore the tension in the report’s findings. Labour Party Interim National Publicity Secretary Tony Akeni said the numbers match daily struggles. “While the President talks about growth and reduced inflation, these are only figures on paper. They haven’t translated into any advantage for the ordinary Nigerian,” Akeni said.
He added, “In some places, people earn maybe a dollar or two a day. It’s crazy.”
New Nigeria People’s Party spokesman Ladipo Johnson blamed policy impacts for worsening debt and poverty. “The President keeps proposing new loans even after exceeding budget targets. These contradictions point to more perils for Nigeria,” Johnson said.
He warned the rate could rise further by year-end and called for scrutiny from civil society.
Peoples Democratic Party Deputy National Youth Leader Timothy Osadolor accused the government of misleading the public. “We don’t need the World Bank or the UN to tell us there’s hunger in the land. You can see it on the faces of Nigerians everywhere,” Osadolor told reporters.
He urged restoring confidence before history judges the administration harshly. African Democratic Congress National Publicity Secretary Bola Abdullahi dismissed growth claims as irrelevant.
“The GDP numbers mean nothing because they don’t reflect the lives of ordinary Nigerians. We’re glad the World Bank has said it, maybe the government will listen to its friends if they don’t want to listen to us,” he added.
Nigeria Labour Congress Assistant General Secretary Chris Onyeka said workers feel the pinch directly. “We know the truth. Millions are struggling to meet basic needs,” he said.
With inflation, naira weakness, and rising costs, the 70,000 naira wage—about 46 US dollars monthly—”barely covers the cost of a bag of rice.” Onyeka stressed, “Poverty is not an abstract statistic; it is lived reality,” and called for welfare and rights focus.
Economists noted the lag between reforms and relief. Centre for the Promotion of Private Enterprise Chief Executive Muda Yusuf explained, “The process of fixing what’s broken has aggravated poverty,” due to inflation from exchange unification and subsidy cuts.
He urged interventions in agriculture, infrastructure, and energy. “We need different policies now to address welfare directly.”
Former University of Uyo Vice-Chancellor Professor Akpan Ekpo said four percent growth is insufficient. “You can’t grow at four percent and expect poverty to drop. Growth must be double-digit and sustained for years, like China did,” he said.
He favoured human capital investments over cash transfers.
Former Chartered Institute of Bankers of Nigeria President Okechukwu Unegbu questioned the figures’ accuracy but acknowledged the issue. “I don’t believe everything the World Bank says, but there’s no denying poverty is everywhere,” he said.
“I don’t believe everything the World Bank says, but there’s no denying poverty is everywhere,” he said.
Proshare Nigeria Chief Economist Teslim Shitta-Bey called reforms inevitable but stressed distribution. “Exchange rate unification and subsidy removal were inevitable, but the challenge now is ensuring the gains reach ordinary Nigerians,” he told reporters.
With GDP eyeing 4.4% by year-end, he pushed for power improvements and digital training. “The world rewards multiple income streams; Nigeria must prepare its people to earn globally.”
International Monetary Fund historical data supports the World Bank’s long-term view: average GDP growth was 2.7% yearly from 2015 to 2023, down from 7% in 2000-2014. Sustaining four percent could cut poverty by 4.5 points by 2030, lifting five million out, assuming 2.5% population growth for 233 million people and job absorption in non-oil sectors.
Agriculture reforms might raise productivity 15-20%, adding 1.2 million manufacturing jobs by 2030. Without fiscal shifts, such as reallocating 1.5% of the budget to rural areas, the Gini coefficient could exceed 35 by 2030, per World Bank simulations. The fiscal deficit holds at 2.6% of GDP in 2025, with spending at 12.1%, including 3.5% on personnel and 4% on capital.
Nigeria’s economy, at 188.27 billion US dollars in 2025, relies less on oil, with non-oil at over 90% of GDP.
The report urges redirecting Federation Account Allocation Committee deductions of 1.79 trillion naira in 2024 to pro-poor areas like health (263 billion naira budget) and education (1.34 trillion naira). Stabilizing poverty by 2026 depends on this shift, as inflation eases to 15.8% in 2027 under tight policy.