Tackling inflation remains Nigeria’s top priority to halt rising poverty – World Bank

Tackling inflation remains Nigeria’s top priority to halt rising poverty – World Bank

The World Bank Country Director for Nigeria, Mathew Verghis, has warned that reducing inflation is the most urgent step needed to stabilise the Nigerian economy, restore purchasing power, and halt the alarming rise in poverty levels.

Speaking in an interview with ARISE News on Thursday, Verghis said poverty in Nigeria is projected to continue rising into 2025 — and possibly 2026 — because inflation remains high enough to severely weaken household incomes, particularly among low-income families. He noted that although food inflation has eased, it remains elevated at around 20 percent.

Verghis stressed that both monetary and fiscal authorities must avoid loosening policy prematurely, cautioning that Nigeria still ranks among countries with the highest inflation globally.

“Bringing inflation down should be a very high priority. There’s still a long way to go, and that’s arguably the most urgent task of the stabilisation process,” he said.

He identified long-term structural pressures such as high transport costs, poor infrastructure, weak energy supply, and lack of irrigation as major drivers of persistent price increases. According to him, the World Bank is supporting federal initiatives aimed at addressing these constraints.

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One of the quickest ways to ease inflation, he suggested, is by reviewing restrictive trade policies. He argued that Nigeria’s high tariffs and import bans on goods consumed largely by the poor are distorting prices. Removing some of these restrictions, he said, is not only inflation-reducing but also aligns with ECOWAS trade commitments.

Verghis praised the Central Bank of Nigeria (CBN) for retaining the benchmark interest rate at 27 percent, describing the move as consistent with stabilisation efforts. On the exchange rate, he emphasised that stability should reflect market fundamentals, noting that increased exports and stronger foreign investment remain the most sustainable ways to keep the Naira stable.

He also commended Nigeria’s progress in revenue diversification, pointing out that the country is now less dependent on oil revenues due to a more realistic exchange rate regime and the removal of petrol subsidies. Rising non-oil revenues, he said, would allow for greater investment in infrastructure and human capital.

On Nigeria’s debt outlook, Verghis said the debt-to-GDP ratio has moderated to a more comfortable level, while the debt-to-revenue ratio is declining for the first time in years. However, he warned that borrowing only remains beneficial if funds are effectively utilised.

“If you keep borrowing and the money gets wasted, then eventually you’ll have a debt problem. The key is that the debt is borrowed and spent wisely,” he said.

The World Bank chief emphasised that inclusive growth requires deliberate pro-poor spending, highlighting the federal government’s plan to reach 15 million vulnerable households through a digital social registry and targeted cash transfers.

He added that investments in children, clean water, nutrition, education, and health are critical for boosting long-term productivity and reducing generational poverty.

Verghis concluded that Nigeria must pair immediate inflation-control measures with long-term structural reforms to improve its economic outlook.

“It’s a combination of immediate measures to bring inflation down and structural measures to encourage investment so that the economy grows at a faster rate than it is now,” he said.

Tackling inflation remains Nigeria’s top priority to halt rising poverty – World Bank