A new study has revealed that about 63 percent of Nigerians fell below the poverty line following the removal of petrol subsidy.
The research, presented at a stakeholders’ dialogue organised by Agora Policy in Abuja, showed that the national poverty rate increased from about 49.8 percent to roughly 63 percent after the policy was implemented. The figure later moderated slightly to around 56.2 percent after the introduction of social protection measures such as cash transfers.
The study was presented by Dr Mohammed Shuaibu, a Senior Lecturer in the Department of Economics at the University of Abuja, during a dialogue focused on Nigeria’s economic reform programme.
According to the findings, the removal of the petrol subsidy triggered widespread price increases across the economy and significantly reduced household purchasing power, particularly among low-income families.
The research also found that the national poverty gap widened significantly after the reform, indicating deeper levels of deprivation among poor households.
Household consumption declined across income groups following the subsidy removal and electricity tariff adjustments, although social protection programmes helped cushion the impact for some low-income households.
Participants in focus group discussions across Nigeria’s six geopolitical zones said many families had responded to the economic shock by cutting consumption, reducing transport use, rationing electricity, and borrowing money to meet basic needs.
Businesses also reported rising operational costs due to higher fuel and electricity prices, forcing some firms to increase prices, reduce staff, or shut down operations.
Speaking at the event, the Deputy Governor of the Central Bank of Nigeria for Economic Policy, Muhammad Abdullahi, said the reforms were necessary to address long-standing economic distortions and declining government revenues.
He explained that Nigeria had experienced a sharp drop in oil earnings and faced major imbalances in its foreign exchange system, making policy reforms unavoidable.
However, business leaders noted that while some macroeconomic indicators have improved, the benefits of the reforms have not yet been widely felt by ordinary Nigerians and small businesses.
