The World Bank has urged Nigeria to ensure that the benefits of its recent economic reforms reach ordinary citizens, warning that macroeconomic stability alone will not be enough to lift millions out of poverty. Speaking in Abuja at the launch of the October 2025 edition of the Nigeria Development Update (NDU), the Bank’s Country Director for Nigeria, Mathew Verghis, said that while the country has made important progress, more needs to be done to improve living standards.
The latest report, titled “From Policy to People: Bringing the Reform Gains Home,” assesses the performance of Nigeria’s economy following wide-ranging reforms introduced since 2023. These include the removal of petrol subsidies and the unification of exchange rates—two of the most significant policy shifts in decades. The World Bank acknowledged that these measures have begun to restore confidence in the economy, stabilise public finances, and improve prospects for growth.
Verghis said the reforms have “laid the foundation for transforming Nigeria’s economic trajectory,” noting that early signs of stabilisation are visible. Growth and government revenues are improving, foreign reserves are recovering, and the exchange rate is becoming more reflective of market conditions. Inflation, while still high, has started to moderate. Yet, he cautioned that these macroeconomic gains have not yet translated into better living conditions for most Nigerians.
“The government has made commendable progress in taking tough but necessary decisions,” Verghis said. “However, the true measure of success will be whether these reforms deliver jobs, reduce poverty, and improve welfare.” He added that approximately 139 million Nigerians still live below the poverty line—a figure that underscores the urgency of ensuring that reform outcomes are felt across all social groups.
Progress tempered by hardship
The NDU highlights a delicate balance in Nigeria’s current economic situation. On the one hand, key indicators suggest the country is gradually recovering from years of fiscal strain and policy distortions. On the other hand, households continue to struggle with high living costs, particularly food prices, which have eroded purchasing power and deepened inequality.
Inflation surged after the removal of fuel subsidies and the liberalisation of the exchange rate, driving up transport and food costs. While headline inflation has begun to ease, food inflation remains persistently high and continues to push many families further into hardship. The World Bank said this dynamic has muted the benefits of reform, with the poorest Nigerians spending most of their income on food.
Samer Matta, the Bank’s Senior Economist for Nigeria, described food inflation as “the biggest tax on the poor,” explaining that the burden of rising prices has fallen disproportionately on low-income households. He called for urgent policy interventions to stabilise food supply chains, improve agricultural productivity, and reduce trade bottlenecks that contribute to price volatility.
Laying the groundwork for inclusive growth
The report outlines a three-pronged strategy for ensuring that Nigeria’s reform gains are both sustainable and inclusive. The priority, it argues, is to tackle inflation, particularly food inflation, through targeted interventions in the agricultural and logistics sectors. Improving transport infrastructure, reducing import barriers on essential commodities, and enhancing access to farm inputs would all help stabilise prices.
The second is to make public spending more efficient and better aligned with development goals. While fiscal reforms have increased government revenue, the World Bank noted that spending priorities still need to shift toward health, education, and social services that directly benefit the population. Strengthening transparency and accountability in budget execution, it said, would also ensure that resources are used more effectively.
The third priority is to strengthen social protection. The Bank urged the Nigerian government to scale up cash transfer programmes and institutionalise a safety net system capable of supporting vulnerable households during economic shocks. This, it said, would make the reform process more equitable and help build public support for continued policy adjustment.
“The next phase of reform must focus on people,” Verghis said. “Macroeconomic stability creates the space for growth, but social protection and human capital investment will determine whether that growth is inclusive.”
Government response and outlook
The federal government has welcomed the World Bank’s acknowledgement of progress but disputed the Bank’s estimate that 139 million Nigerians are living in poverty. Officials argue that the figure does not fully reflect recent social investment initiatives and improvements in agricultural productivity. They maintain that the administration is focused on reducing inflation, expanding access to credit for small businesses, and rolling out targeted cash transfers to cushion vulnerable citizens.
Government spokespersons also highlighted the implementation of the Renewed Hope programmes, including conditional cash transfers and rural infrastructure projects, as evidence that efforts are underway to deliver relief and opportunity to the poor. “We are aware of the current hardship, but the policies we have adopted are designed to create a more sustainable and inclusive economy in the long term,” one senior official said.
The World Bank, for its part, remains cautiously optimistic about Nigeria’s outlook. It projects that economic growth will strengthen in the medium term if current policies are maintained and accompanied by continued structural reforms. However, it warned that risks remain high, particularly if inflationary pressures persist or if reform fatigue sets in.
In conclusion, the Nigeria Development Update offers a mixed picture: a reforming economy showing encouraging signs of stability but still burdened by deep social and structural challenges. The Bank’s message is clear; Nigeria has taken the right steps, but the hardest part lies ahead. “Reforms take courage, and Nigeria has demonstrated that,” Verghis said. “Now it is time to ensure that the gains from those reforms reach every Nigerian household.”
