E-Financial
How Policy Flip-Flops Are Making Nigerians Poorer
By Blaise Udunze
Nigeria’s deepening poverty crisis is no longer speculative; it is now statistically inevitable. Although the latest Consumer Price Index figures released by the National Bureau of Statistics (NBS) suggest that headline inflation is cooling and growth indicators show tentative improvement, regrettably, more Nigerians are slipping below the poverty line. Reviewing the recent projections from PwC’s Nigeria Economic Outlook 2026, it is alarming, which reveals that no fewer than two million additional Nigerians are expected to fall into poverty next year. This is expected to push the total number of poor people to about 141 million, roughly 62 percent of the population and the highest level ever recorded in the country’s history.
This grim outlook persists despite eight consecutive months of easing inflation and modest economic recovery, and as one can perceive, the contradiction is telling. The fact remains that macroeconomic signals are improving on paper, yet lived reality continues to deteriorate. It is glaring that the widening gap between policy metrics and human outcomes exposes a deeper truth in the sense that Nigeria’s poverty crisis is not simply the product of external shocks or temporary adjustment pains. It is the cumulative result of fragile policymaking, inconsistent reforms, weak institutional coordination, and a failure to sequence economic changes with adequate social protection. With these, it becomes clearer that poverty in Nigeria is no longer an unintended side effect of reform; it is increasingly its most visible outcome as identified today.
It would be recalled that the current administration in 2023, when it assumed office, promised a bold economic reset. At this point, the nation witnessed the fuel subsidy removal, exchange-rate liberalisation, and tighter fiscal discipline being introduced swiftly and applauded internationally for their courage and long-term logic. Notably, these reforms unleashed an economic storm whose aftershocks continue to batter households and currently resulting to the cost of a bag of rice that sold for about N35,000 two years ago now costs between N65,000 and N80,000, while a crate of eggs has risen from N1,200 to over N6,000 and basic staples like garri, tomatoes, and pepper have drifted beyond the reach of ordinary Nigerians. For millions, the economy did not reset; it snapped.
Inflation, often described by economists as a “silent tax,” has punished productivity, mocked thrift, and rewarded speculation.
Reports from the NBS’s December 2025 disclosed that headline inflation eased to 15.15 percent and according to it, this is due to a rebasing of the Consumer Price Index, down sharply from 34.8 percent a year earlier, this statistical moderation has brought little relief to households. Food inflation, at 10.84 percent year-on-year, and a marginal month-on-month decline may look reassuring on spreadsheets, but for families spending 70 to 80 percent of their income on food, such figures feel detached from reality. These figures are not only implausible but also insulting to those whose lives have been torn apart by the skyrocketing prices. With the realities facing the larger populace, Nigeria must be using another mathematics.
Nigeria may have changed its base year, but it has not changed the harsh arithmetic of survival.
PwC’s data underscores this disconnect, as nominal household spending rose by nearly 20 percent in 2025, real household spending contracted by 2.5 percent, reflecting the erosive impact of rising food, transport, and energy costs. The painful part of it, is that Nigerians are spending more money to consume less, and this is to say that growth, hovering around 4 percent, is not strong enough to absorb shocks or lift households meaningfully. As analysts note, Nigeria would require sustained growth of 7 to 9 percent to make a significant dent in poverty. That is to say that anything less merely slows the descent.
The structural weakness of the economy is compounded by policy inconsistency. Nigeria’s economic landscape is littered with abrupt shifts, subsidy removals without buffers, currency reforms without stabilisation mechanisms and trade policies that oscillate between restriction and openness. For households and small businesses, which employ most Nigerians, this unpredictability makes planning impossible. The economy has constantly being faced with price volatility, income shocks, and lost jobs because these are the ripple effects of every policy reversal. Uncertainty itself has become a poverty multiplier.
Nowhere is this fragility more evident than in food systems and rural livelihoods, and this has been where insecurity has merged with policy failure to create a new poverty spiral. Across farmlands in the North and Middle Belt, crops rot unharvested as banditry and insurgency force farmers off their land. Nigeria’s largely agrarian economy has been crippled by violence that disrupts planting cycles, destroys infrastructure, and displaces communities. The result is both income poverty for farmers denied access to their livelihoods and food inflation that erodes purchasing power nationwide.
For record purposes, earlier last year, the NBS Multidimensional Poverty Index showed that 63 percent of Nigerians, about 133 million people, are multidimensionally poor, with poverty heavily concentrated in insecure regions. Findings showed that about 86 million of the poor live in the North, and this is where insecurity is most severe. This record showed that rural poverty stands at 72 percent,c compared to 42 percent in urban areas, and while the states most affected by banditry and insurgency record poverty rates as high as 91 percent. Insecurity is no longer just a security problem; it is one of Nigeria’s most powerful poverty drivers.
The economic cost of insecurity in Nigeria today is staggering. This is because the conservative estimates suggest Nigeria loses about $15 billion annually, which is roughly equivalent to N20 trillion, due to insecurity-induced disruptions across agriculture, trade, manufacturing, and transportation. At the same time, security spending now consumes up to a quarter of the federal budget. In just three years, over N4 trillion has been spent on security, which crowded out investment in health, education, power, and infrastructure. Every naira spent managing perpetual violence is a naira not invested in preventing poverty, even as poverty deepens, the state’s fiscal response reveals a troubling misalignment of priorities. The 2026 federal budget, estimated at N58.47 trillion, ironically allocates just N206.5 billion to projects directly tagged as poverty alleviation and this only amounts to about 0.35 percent of total spending and less than one percent of the capital budget. In a country where over 60 percent of citizens live below the poverty line, this allocation borders on policy negligence.
Worse still, over 96 percent of this already meagre poverty envelope sits under the Service Wide Vote through the National Poverty Reduction with Growth Strategy, largely as recurrent provisions. All ministries, departments, and agencies combined account for barely N6.5 billion in poverty-related projects. This fragmentation reflects a deeper institutional failure, that is to say, poverty reduction exists more as a line item than as a coherent national mission.
Where MDA-level interventions exist, they are largely palliative and scattered, grain distribution in select communities, tricycles and motorcycles for empowerment, and small scale skills acquisition for women and youths. The largest such project, a N2.87 billion tricycle and motorcycle scheme under a federal cooperative college, accounts for nearly half of all MDA-based poverty spending. The fact remains that the various interventions may offer temporary relief, and they do little to address structural drivers of poverty such as job creation, productivity, market access and human capital development.
Even the Ministry of Humanitarian Affairs and Poverty Alleviation illustrates the problem just as its budget jumped sharply in 2026, much of the increase went into administrative and capital items, office furniture, equipment, international travel, retreats, and systems automation rather than direct poverty-fighting programmes. This reflects a familiar Nigerian paradox: institutions grow, but impact shrinks.
International partners have been blunt in their assessments. The World Bank estimates that Nigeria spends just 0.14 percent of GDP on social protection, which is far below the global and regional averages. Only 44 percent of safety-net benefits actually reach the poor, rendering the system inefficient and largely ineffective. PwC similarly warns that without targeted job creation, productivity-focused reforms, and effective social protection, poverty will continue to rise, undermining domestic consumption and straining public finances further.
Fiscal fragility compounds the crisis. The N58.18 trillion 2026 budget carries a deficit of N23.85 trillion, with debt servicing projected at N15.52 trillion, nearly half of expected revenue. The public debt has ballooned to over N152 trillion. The contradiction here is that Nigeria is borrowing not to expand productive capacity but to keep the machinery of government running. The truth is not far-fetched because, as debt crowds out development spending, households are forced to pay privately for public goods, education, healthcare, water, deepening inequality and entrenching poverty across generations.
To be clear, not all signals are negative. This is because opportunities exist if reforms are sustained and properly sequenced. Regional trade under the African Continental Free Trade Area could diversify exports and create jobs. But reform momentum without inclusion and institutional capacity risks becoming another missed opportunity.
This is the central tragedy of Nigeria’s moment. The country is attempting necessary reforms in an environment of weak buffers, fragile institutions, and low trust. Poverty is therefore not accidental. It is the predictable outcome of inconsistency, reforms without protection, stabilisation without security, and budgets without people.
Nigeria faces an undeniable choice. It can continue down a path where fragile policies deepen deprivation and erode trust, or it can build a disciplined, coordinated framework that aligns reforms with social protection, security, and inclusive growth. Poverty is not destiny. But escaping it requires more than courage in reform announcements; it demands consistency, compassion, and the political will to place human welfare at the centre of economic strategy.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
Central Bank of Nigeria (CBN), has ordered banks to refund a total N19.12 billion to customers for illegal deductions and poor complaint handling.
This is coming as bank customers lodged 23,129 complaints against financial institutions in 2025, representing 11 per cent increase over the previous year.
The apex bank also imposed N1.69 billion in penalties on financial institutions for regulatory breaches, poor complaint handling and failure to comply with its directives, according to its 2025 Annual Report.
The CBN attributed the increase in complaints to growing public confidence in its consumer protection framework rather than a deterioration in banking services.
The report stated: “The Bank received a total of 23,129 complaints from consumers of financial services in 2025, a rise of 10.53 per cent above the 20,925 in 2024. The trend reflected increased awareness and improved confidence in the Bank’s consumer complaint resolution process.”
The apex bank added: “A total of 18,824 complaints were resolved, indicating a 9.36 per cent increase over the 17,213 complaints resolved in 2024.”
On the value of disputed transactions, the CBN said: “Total claims in local currency increased to N40.61 billion from N17.13 billion in 2024. Foreign currency claims also rose, reaching $344.2 million compared with $1.06 million in the preceding year.”
According to the report, “Based on the resolved complaints, the sums of N19.12 billion and $329.3 million were refunded in 2025, compared with N9.66 billion and $0.67 million in 2024.”
The CBN said it strengthened enforcement against erring financial institutions during the year.
It stated: “During the review period, the Bank imposed 11 penalties on financial institutions totalling N1.26 billion for infractions ranging from regulatory breaches and failure to respond to regulatory queries.”
The report further disclosed: “In addition, the Bank imposed 21 penalties on financial institutions to the tune of N430 million for infractions ranging from delays in resolving customer complaints to failure to comply with the Bank’s directives.”
Access Bank Plc has dismissed rumours circulating on social media that it is shutting down, describing the reports as false and malicious.
The bank, in a statement issued on Thursday, assured customers, shareholders and other stakeholders that it remains financially sound, stable and fully operational, urging the public not to be misled by the viral message.
According to the bank, the fake report falsely portrayed itself as an official communication from Access Bank with the intention of creating panic and disrupting business activities.
“We wish to reassure our customers, partners, stakeholders and the general public that Access Bank is safe, financially strong and fully operational across all our subsidiaries. Our services continue to run seamlessly, and we remain committed to serving our customers with the highest standards of excellence,” the statement read.Business Formation
The bank emphasised that there was no truth whatsoever in the claim that it was preparing to cease operations, insisting that all its branches and digital banking platforms remained fully functional.
Access Bank said it had begun working with regulatory agencies and security authorities to trace those responsible for originating and circulating the false information.
It warned that anyone found culpable would face prosecution in line with the provisions of relevant Nigerian laws.
The lender specifically noted that the creation and dissemination of false information capable of causing panic or eroding public confidence in institutions is punishable under Section 24 of the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act, 2024.
The bank urged customers to exercise caution when consuming information online and to verify any claim through its official communication platforms before taking action.
It also appealed to the public not to forward or circulate the fake message, stressing that doing so could further spread misinformation and create unnecessary anxiety.
Reaffirming its commitment to customers, Access Bank said it would continue to provide secure, reliable and uninterrupted banking services while maintaining the confidence reposed in it by millions of customers across Nigeria and its international operations.
E-Financial
$40Bn Net Reserves, Record Wealth, Relentless Poverty: Who Is Nigeria’s Economy Serving Today?
By Blaise Udunze
No doubt, it was a welcome announcement that Nigeria’s net foreign exchange (FX) reserves have surged by an astonishing 1,233 percent from about $3 billion to over $40 billion. This would ordinarily be the kind of economic milestone that inspires optimism, coupled with gross external reserves of about $52.52 billion, which are sufficient to finance roughly 11 months of imports of goods and services. Penultimate week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has understandably presented the development at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC) as evidence that its reforms are working.
It is no surprise that around the same period, one would say that another important economic event occurred with the government sharing more money than ever before with the federal, state, and local governments, as the Federation Account Allocation Committee (FAAC) distributed a record N2.55 trillion, representing an increase of N250 billion over the N2.3 trillion shared in the preceding month.
Of course, the official figures are impressive numbers. Yes, anyone would conclude that the economy is becoming stronger, more stable and better positioned for growth. While this suggests stronger public finances, it also raises the question of whether these larger allocations are producing tangible improvements in the lives of ordinary Nigerians. More interesting is that another set of figures tells a completely different story.
According to the World Bank’s newly approved Country Partnership Framework for Nigeria, 61 per cent of Nigerians now live below the poverty line, while about 79 per cent are either poor or vulnerable to falling into poverty. More than 139 million Nigerians live below the poverty line. Over 86 million people lack access to electricity, while millions of young Nigerians enter the labour market every year with little prospect of decent employment.
The contradiction could not be starker. If reserves are rising, government revenues are increasing and governments at all levels are receiving record allocations, why are the lives of ordinary Nigerians becoming more difficult?
This is the question policymakers must answer not with statistics, but with tangible improvements in the lives of citizens. If government agencies engineering these figures must know, these are not merely economic statistics; they are the lived realities by which citizens judge any government.
Foreign exchange reserves are not an economic trophy. They are a means to an end. Strong reserves are expected to stabilise the currency, reassure investors, strengthen the country’s ability to withstand external shocks and create an enabling environment for investment, production and employment.
But reserves alone do not feed families nor would they reduce their housing rents. They do not lower transport fares. They do not reduce school fees. They do not make healthcare affordable. Nor do they automatically create jobs.
Ultimately, this is to say that the success of macroeconomic reforms must be measured not by the strength of the CBN’s balance sheet but by the wellbeing of the Nigerian people.
Historically, unlike our dear country, countries that consistently build substantial foreign exchange reserves do so on the back of strong economic fundamentals. The fact is that they maintain sustained trade surpluses, export diversified products, attract large volumes of long-term foreign direct investment (FDI), develop globally competitive manufacturing industries and continuously improve productivity.
Nigeria, unfortunately, still struggles on nearly all these fronts. The country’s export earnings remain overwhelmingly dependent on crude oil. Non-oil exports remain relatively insignificant. Value-added manufacturing exports are weak. Another area that raises concern is agriculture, which continues to export mostly raw commodities rather than higher-value processed products despite being known previously as the country’s mainstay. With all these so-called developments, Nigeria still imports refined petroleum products, machinery, pharmaceuticals, industrial inputs and even food that could be produced locally.
This naturally raises an uncomfortable but legitimate question that requires an answer. Yes, it would be necessary to ask: How exactly has Nigeria grown and accumulated over $40 billion in net foreign exchange reserves without the structural fundamentals that typically support such reserve growth?
The apex bank has continued to credit exchange-rate reforms, improved transparency, stronger investor confidence and increased diaspora remittances. Well, it would be said that these achievements deserve recognition.
However, they do not completely explain the scale or more importantly, the sustainability of the reserve accumulation.
Nigeria has not consistently recorded the large trade surpluses associated with countries that rapidly accumulate reserves. Oil production remains below historical capacity. Export diversification remains limited. Ease of doing business continues to be constrained by multiple taxation, infrastructure deficits, insecurity, policy uncertainty, logistics bottlenecks and unreliable electricity.
Without addressing these structural deficiencies, reserve accumulation risks becoming more financial than productive.
Equally important is the question of foreign direct investment. Governor Cardoso has argued that improved macroeconomic stability is attracting foreign investors. That may well be true. But confidence alone does not build factories.
The real question is how much fresh FDI has actually entered Nigeria’s productive sectors? How much has gone into manufacturing? How much into agro-processing? How much into export-oriented industries capable of generating sustainable foreign exchange earnings and creating jobs?
If reserve growth is being driven largely by short-term portfolio investments attracted by high interest rates rather than long-term productive investment, then Nigeria remains vulnerable. Portfolio investors can exit as quickly as they entered whenever global financial conditions change.
The unarguable fact is that foreign direct investment, by contrast, creates factories, expands production, develops supply chains and creates lasting employment. Nigeria desperately needs more of the latter.
The CBN also points to diaspora remittances as a growing source of reserve accumulation, projecting inflows of approximately $1 billion every month before the end of the year. Again, this is encouraging.
Again, the country will not be tired of asking questions because several of these questions deserve closer examination. How much of these remittances represent genuinely new inflows rather than funds previously routed through informal channels? Come to think of it, how much of these remittances finance productive investments instead of household consumption? Can diaspora remittances realistically become a permanent substitute for export competitiveness?
No economy has ever industrialised on remittances alone. A nation cannot sustainably depend on the sacrifices of its citizens abroad while failing to create opportunities for them at home.
Beyond the reserve figures lies another troubling contradiction. This is more disturbing because every month, FAAC distributes unprecedented sums to governments across Nigeria. Yet again, with daily regret, the average Nigerian struggles with deteriorating public services.
Honestly speaking, it has become so frustrating that the majority of the people who yearn for pleasant or attractive experiences are struggling as roads remain poor, public hospitals remain overstretched, schools continue to decline, electricity remains unreliable, water infrastructure remains inadequate, youth unemployment remains widespread. Worst still, think of the cases as the nation continues to grapple with rising inflation, worsening poverty, declining purchasing power, struggling businesses and persistent insecurity.
One major contradiction is that if revenues continue rising while poverty deepens, then one unavoidable question must be asked: Where is the money going? Another pertinent question: How can the citizens be surrounded by water and still suffer from thirst or soap lather in their eyes?
This has been the predominant worry in the minds of many even as the World Bank itself acknowledges this disconnect. While praising recent macroeconomic reforms for improving fiscal stability, strengthening foreign reserves and restoring investor confidence, it concludes emphatically that the gains have not translated into meaningful improvements in living standards.
Ironically, despite the claims of declining inflation, it continues to erode purchasing power. Social protection remains weak. Most Nigerians remain trapped in low-productivity informal employment.
One contradicting and astonishing step taken recently is nowhere more evident than in the Central Bank’s monetary policy. Consider this that, despite a marginal decline in headline inflation to 15.91 percent in June 2026, the Monetary Policy Committee retained the benchmark Monetary Policy Rate (MPR) at 26.5 percent, alongside a 45 percent Cash Reserve Ratio (CRR) for commercial banks.
The decision reflects understandable caution. The CBN remains concerned that escalating geopolitical tensions in the Middle East could increase global energy prices, worsen imported inflation and reverse recent gains in price stability.
From a monetary policy perspective, this caution is defensible. But from the standpoint of businesses and households, the consequences are profound. An interest rate of 26.5 per cent inevitably translates into prohibitively expensive bank lending.
The ripple and adverse effects have led to manufacturers struggling to finance expansion. Another tough aspect is seeing the small and medium-sized enterprises, the backbone of employment generation, find access to affordable credit increasingly difficult. Entrepreneurs postpone investments. Factories delay expansion. Potential employers reduce hiring. Economic growth slows.
Ironically, while it is understandable that high interest rates may help stabilise inflation and attract foreign portfolio inflows that support reserves, it should be made known that they simultaneously suppress domestic investment, production and job creation.
In other words, the same policies helping strengthen the country’s macroeconomic indicators may also be constraining the real economy. Even the celebrated decline in inflation deserves closer scrutiny.
The national inflation rate may have eased marginally to 15.91 per cent, but this national average masks severe hardship across much of the country, which continues to create perpetual pain.
How best can this be figured out if data from the National Bureau of Statistics show that 19 states and the Federal Capital Territory recorded inflation rates exceeding 30 per cent, with Niger State above 42 percent and Kogi State exceeding 41 per cent?
Food inflation continues to rise, driven by increases in the prices of tomatoes, pepper, beef, yams, garri and other staple foods.
Businesses themselves remain unconvinced. The Organised Private Sector has welcomed the marginal moderation in inflation but insists that prices remain painfully high for both consumers and businesses.
Leaders of small business associations argue that market realities tell a different story from headline statistics. For millions of Nigerians, inflation is not measured by percentages. It is measured by empty shopping baskets. By reduced meal portions. By businesses shutting their doors. By families withdrawing children from school. By postponed medical treatments.
From a theoretical standpoint, macroeconomic stability is undoubtedly necessary. Without it, sustainable development is impossible. But it would also be agreed that macroeconomic stability alone is not sufficient. It can be argued further that economic reforms must eventually improve household incomes, reduce poverty, expand productive employment and raise living standards.
Otherwise, they risk becoming reforms that look impressive in economic reports but remain invisible in everyday life.
The truth remains that with the current situation, Nigeria therefore stands at a critical pivotal moment and the decisions taken now will determine its future.
The current reserve position should not become a destination for celebration but a foundation for deeper structural transformation. The country must diversify exports beyond crude oil. Strengthen manufacturing. Promote value-added agricultural exports. Improve electricity supply. Reduce the cost of doing business. Expand logistics infrastructure. Attract long-term productive investment.
In addition, support local industries with affordable financing. Strengthen institutions. Improve governance and ensure greater accountability for public spending. Only then will rising reserves translate into rising prosperity. Only then will record FAAC allocations produce visible development. Only then will macroeconomic stability become household stability.
The ultimate measure of economic success is not the number of dollars held in the Central Bank’s vaults. It is whether parents can afford school fees and housing rent. Whether young graduates can find decent jobs. Whether businesses can borrow, produce and expand. Whether families can afford food without sacrificing nutrition. Whether citizens feel that economic growth includes them.
Until those questions receive positive answers, one uncomfortable question will continue to linger. Who Is Nigeria’s Economy Serving Today?
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
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