Why More Nigerians Became Poorer Between 2024 and 2025

By Obinna Ejianya (9News Nigeria – Melbourne, Australia)

Between 2024 and 2025, Nigeria experienced a noticeable decline in living standards that affected a large portion of the population. During this period, poverty increased significantly, and many households that were previously considered financially stable found themselves struggling to cope with rising costs and declining incomes.

According to the World Bank’s assessments on poverty in Nigeria, an estimated 139 million Nigerians—more than 61 percent of the population—were living below the poverty line by 2025. This represents an increase from 113 million in 2023 and about 129 million in 2024. While the Federal Government has raised concerns about the methodology used in these estimates, data from the National Bureau of Statistics (NBS), particularly on inflation, household consumption, and labour market trends, points to a clear decline in overall household welfare.

When factors such as food insecurity, underemployment, and the vulnerability of the informal sector are considered, a very large share of Nigerians can be described as economically insecure. For many households, income levels and savings have declined to the point where coping with unexpected expenses has become increasingly difficult.

One of the main drivers of this situation was the sharp increase in fuel prices following the removal of fuel subsidies. Fuel plays a central role in Nigeria’s economy, affecting transportation, manufacturing, agriculture, and everyday commercial activities. As fuel prices rose, costs increased across multiple sectors at the same time. In the absence of sufficient support measures, these higher costs were passed on to businesses and households.

Small and medium-sized enterprises, which employ a majority of Nigerians, were particularly affected. Rising operating expenses, weaker consumer demand, and supply chain disruptions led many businesses to reduce staff or shut down entirely. NBS data during this period shows declining output and rising job losses in several non-oil sectors. As a result, many Nigerians lost jobs or sources of income, increasing the number of households falling into poverty.

Food inflation further worsened the situation. NBS Consumer Price Index data shows that food inflation exceeded 40 percent by late 2024 and remained high into 2025. The World Bank has noted that Nigerian households now spend a large share of their income—sometimes up to 70 percent—on food. This leaves limited resources for other basic needs such as healthcare, education, housing, and transportation. For some households, income is no longer sufficient to meet even basic nutritional requirements.

The effects were not limited to low-income households. Many salaried workers, professionals, and small business owners also experienced a decline in purchasing power due to inflation and currency depreciation. Savings were reduced, real wages failed to keep pace with rising prices, and many households experienced downward economic mobility.

Another important factor contributing to rising poverty has been Nigeria’s growing public debt and delays in meeting domestic payment obligations. Data from the Debt Management Office (DMO) and the National Bureau of Statistics shows that total public debt increased from about ₦87.9 trillion in 2023 to ₦121.7 trillion in early 2024, before rising above ₦152 trillion by mid-2025. Currency depreciation increased the naira value of external debt, while domestic borrowing also expanded through various government instruments.

As debt servicing takes up a larger share of government revenue, less funding is available for infrastructure and social spending. In addition, many Nigerian companies—particularly government contractors—have been owed substantial sums for completed work. These unpaid obligations have affected business cash flow, led to staff layoffs, delayed salaries, and contributed to financial hardship for workers and their families.

Challenges related to governance have also played a role. Limited transparency in revenue management, borrowing, and public spending has weakened accountability and affected the effectiveness of government programmes. While borrowing is often intended to support development projects, concerns remain about implementation, oversight, and overall impact.

Insecurity has further affected economic activity in several parts of the country, especially in the North-East and North-West. Farming, trade, and transportation have been disrupted, reducing incomes and reinforcing regional poverty patterns documented in NBS and World Bank data. Insecurity has also discouraged investment, contributing to job losses and slower economic growth.

Despite official statements pointing to reform progress and macroeconomic stabilisation, several outcome indicators remain concerning. World Bank estimates place Nigeria’s GDP per capita between $807 and $835, among the lowest levels in recent decades. Nigeria is also estimated to account for between 12 and 15 percent of the world’s population living in extreme poverty.

These figures reflect everyday experiences for many Nigerians, including job losses, reduced food consumption, unpaid wages, and financial stress. The increase in poverty between 2024 and 2025 reflects the combined effects of policy changes, economic pressures, governance challenges, and security concerns.

Addressing these issues will require improved fiscal transparency, timely settlement of domestic obligations, more effective social protection measures, better management of public debt, and sustained efforts to improve security. Without these steps, the risk of continued increases in poverty remains high.