Poverty Rate Climbs to 63% After Fuel Subsidy Removal in Nigeria – Report

A new report has revealed that the poverty rate in Nigeria has risen sharply to about 63 percent of the population, following the removal of petrol subsidies and the economic adjustments that followed the policy. The findings, highlighted in a report referenced by Punch Newspapers, suggest that millions of Nigerians have been pushed deeper into financial hardship as the cost of living continues to climb.

The fuel subsidy was removed shortly after President Bola Ahmed Tinubu assumed office in 2023, a move the federal government described as necessary to reduce fiscal pressure and redirect funds toward national development. However, the report indicates that the immediate social and economic consequences have significantly affected households across the country.

Poverty and Rising Cost of Living Deepens Economic Hardship

The removal of the petrol subsidy triggered a dramatic increase in fuel prices across the country. As transportation costs rose, the prices of food, goods, and essential services also surged. For many households already struggling with limited income, these increases have created severe financial pressure.

According to analysts referenced in the report, inflation and the rising cost of basic necessities have made it difficult for many families to maintain previous living standards. Workers in the informal sector, who make up a large portion of the labour force, have been particularly affected because their incomes have not increased at the same pace as the cost of living.

Economic observers note that while subsidy removal may produce long-term fiscal benefits than poverty, the short-term effects have placed a heavy burden on low-income Nigerians. With food prices continuing to rise and wages remaining largely stagnant, more households are falling below the poverty line.

Government Reforms and Economic Expectations

Government officials have repeatedly defended the subsidy removal policy, arguing that the previous system was unsustainable and drained public finances. Authorities say funds previously spent on fuel subsidies will be redirected toward infrastructure development, social welfare programmes, and economic reforms intended to strengthen the country’s long-term growth and poverty management.

Supporters of the policy also argue that subsidy payments disproportionately benefited wealthier Nigerians who consumed more fuel, rather than the poorest citizens. By eliminating the subsidy, the government aims to invest resources in targeted programmes such as transportation support, conditional cash transfers, and other social interventions.

However, critics maintain that the transition has been poorly managed. They argue that the social safety nets promised to cushion the impact have not reached enough vulnerable Nigerians, leaving many citizens to cope with the economic shock largely on their own.

Experts Call for Stronger Social Protection Measures

Economists and policy experts say the rising poverty rate highlights the urgent need for more effective social protection programmes. Without stronger support systems, they warn that economic reforms could widen inequality and increase social tensions.

Some analysts recommend expanding cash transfer programmes, investing in job creation, and stabilising food prices through agricultural support policies. Others stress the importance of improving economic productivity and strengthening small businesses to create sustainable income opportunities.

While the long-term effects of subsidy removal remain uncertain, the report underscores the immediate reality faced by many Nigerians: higher living costs, shrinking purchasing power, and growing concerns about economic stability.