*The World Bank, once again, urges the Nigerian Government to prioritise citizens’ welfare and help to mitigate the impact of future shocks by empowering households to make necessary investments in human capital to prevent ‘inter-generational transmission of poverty’

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In order for the West African country to deliberately avert what the global lender has described as “inter-generational transmission of poverty”, the World Bank again, has advised the Federal Government to implement reforms that protect the poorest and most vulnerable consumers against the rising inflation in the economy.

The World Bank, which noted this in its April 2025 Poverty and Equity Brief for Nigeria released recently, advised the Federal Government to boost the livelihoods of all Nigerians through more productive work, which it said is key to reversing high poverty levels in the country as of now.

The global lender, last month, in its Africa鈥檚 Pulse report, had declared projected that more Nigerian consumers would become poor over the next five years.

The Bank cited the country’s structural economic weaknesses, dependence on oil revenues, and national fragility as key barriers to meaningful poverty reduction measures in the economy.

Still, the government, in a bid to alleviate the inflationary effects of recent economic reforms on especially the poor and the vulnerable, has launched temporary cash transfers to reach 15 million households.

The World Bank, however, argued that the deployment of such social benefits has been slow to make the required impact on the populace.

On economic reforms and spikes in inflation rates

President Bola Ahmed Tinubu, since assumption of office, has implemented聽 wide-ranging economic reforms, including removal of the controversial petrol subsidy, and unification of the exchange rates, leading to the floating of the Naira.

Several consumers believe the far-reaching reforms have ignited higher inflation rates.

For instance, Nigeria鈥檚 annual inflation rose slightly to 24.23 percent March 2025, from 23.18 percent in the prior month, which was the softest since June 2023, analysts said.

Food inflation, the largest component of the inflation basket, remained elevated but eased to 21.79 percent from 23.51 percent in the prior month.

The core inflation, which excludes the prices of volatile agricultural products and energy, quickened to 24.43 percent, from 23.01 percent in the previous month. Monthly, consumer prices rose by 3.90 percent in March, accelerating from 2.04 percent in February.

Nexus between Labour incomes and soaring inflation

Acknowledging the fact that the macroeconomic reforms have begun to stabilise the Nigerian economy, the World Bank report yet stated: 鈥淢ultiple shocks in a context of high economic insecurity have deepened and broadened poverty.

“Since 2018/19, an additional 42 million people have fallen into poverty, so more than half of all Nigerians (54 percent) are estimated to live in poverty in 2024, based on World Bank projections.”

The Bank further explained: 鈥淎lthough recent macroeconomic reforms have begun to stabilise the economy, inflation remains high, dampening consumer demand and continuing to undermine the purchasing power of Nigerians.

“Labour incomes have not kept up with inflation, pushing many Nigerians, particularly in urban areas, into poverty.鈥�

How Nigeria can prevent inter-generational transmission of poverty, by World Bank

As regards to need for social protection for vulnerable citizens, the World Bank noted that strengthening the country’s social protection system with a focus on building resilience and enabling human capital investments could be funded through recent fiscal savings from the reform of Premium Motor Spirit (PMS) otherwise known as petrol.

According to the bank, this is crucial in helping to mitigate the impact of future shocks, and allow households to make necessary investments into human capital to avoid inter-generational transmission of poverty.

The Bank also stated: 鈥淭hese short-term interventions need to be complemented by economic diversification that grows the non-oil sector and creates private sector jobs, together with investments into public services, especially in health, education, and infrastructure.

“Improving the effectiveness and efficiency of public investments is especially important in the context of limited fiscal space.”

Referencing the most recent official household survey data from the National Bureau of Statistics (NBS), 30.9 percent of Nigerians lived below the international extreme poverty line of $2.15 per person per day (2017 PPP) in 2018/19 before the COVID-19 pandemic, the report stated.

The global lender added: 鈥淣igeria remains spatially unequal. The poverty rate in northern geopolitical zones was 46.5 percent in 2018/19, compared with 13.5 percent for southern.”

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