The development highlights a widening gap between macroeconomic improvements and the actual welfare of households.

Data from the National Bureau of Statistics showed that headline inflation dropped sharply from 34.80 per cent in December 2024 to 15.15 per cent in December 2025.

Food inflation also declined significantly, falling from 39.84 per cent to 10.84 per cent within the same period.

Despite this easing of price pressures, the World Bank noted that inflation remains high enough to erode purchasing power, with household incomes failing to grow at a pace sufficient to offset earlier price shocks.

“Household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining,” the report stated.

The bank explained that the persistence of poverty is largely due to the cumulative effects of previous inflation spikes, which had already weakened real incomes before the recent moderation.

As a result, the impact of lower inflation has not translated into improved living conditions for many Nigerians.

It also pointed to global shocks, particularly the ongoing Middle East conflict, as contributing to rising living costs through increased energy, food, and transportation prices, placing further strain on low-income households.

Beyond inflation, the report highlighted structural challenges within Nigeria’s economy. It noted that recent growth has been driven mainly by the services and industrial sectors, while agriculture—which employs more than half of the country’s poor—has lagged behind.

This imbalance, according to the bank, has limited income growth among the most vulnerable populations and slowed the pace of poverty reduction.

Looking ahead, the World Bank projected a gradual decline in poverty levels beginning in 2026, as inflation continues to ease and macroeconomic conditions stabilise. Poverty is expected to fall to about 59 per cent by 2028, driven by lower food inflation and moderate economic growth.

However, the bank warned that the pace of reduction would remain slow due to structural constraints such as weak job creation, low agricultural productivity, and persistent inequality.

Speaking at the report’s launch, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said that although inflation has declined, it still poses a threat to real incomes and poverty reduction.

He stressed the need for sustained price stability and more inclusive growth, noting that economic expansion must translate into tangible benefits for citizens.

Haile also emphasised the importance of investing in early childhood development, describing it as critical to improving productivity and reducing poverty over the long term.

Also speaking, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government is focused on policies aimed at lifting millions of Nigerians out of poverty through investment-driven growth and targeted social interventions.

Edun noted that while macroeconomic stability is important, it must be complemented by increased investment and job creation. He added that the government is strengthening social safety nets to support vulnerable populations, particularly during periods of high living costs.

According to him, initiatives such as direct benefit transfers are being implemented using digital platforms linked to national identity systems to ensure effective targeting of beneficiaries.

He described support for the poor and vulnerable as essential in any society, adding that such interventions would remain a key component of government policy.

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