A new study has revealed that Nigeria’s poverty rate surged to 63% following the removal of the petrol subsidy. Highlighting the significant economic hardship many households have faced since the reform introduced.
The findings presented during a policy dialogue organized by Agora Policy in Abuja. Where experts and stakeholders gathered to assess the impact of the Federal Government’s economic reform agenda.
Poverty Levels Rise Sharply
According to the research, Nigeria’s poverty rate increased from about 49.8 % to roughly 63% after the government removed the long-standing petrol subsidy.
The study presented by Mohammed Shuaibu of the University of Abuja. Who explained that the policy triggered widespread price increases across the economy.
The removal of the subsidy caused a sharp rise in fuel prices. That is which then pushed up the cost of transportation, food, electricity, and other essential goods and services.
Social Intervention Programs Offer Some Relief
The study also noted that government social protection programmes helped reduce the impact slightly. Measures such as cash transfer programmes provided some relief for vulnerable households.
As a result, the poverty rate later declined to around 56.2%, although the report stressed that millions of Nigerians are still struggling with the rising cost of living.
Low-Income Households Hit the Hardest
Researchers found that low-income families were the most affected. As they spend a larger portion of their income on transportation, food, and energy.
With higher fuel and electricity costs, many households have reportedly been forced to reduce spending, cut back on basic needs, and adopt survival strategies to cope with the economic pressure.
Economic Reform With Short-Term Pain
The removal of the petrol subsidy announced by Bola Ahmed Tinubu during his inauguration. On May 29, 2023, as part of broader efforts to reform **Nigeria’s economy and reduce government spending.
While many economists argue that ending the subsidy was necessary to address long-standing distortions in the economy. The reform has created significant short-term hardship for millions of Nigerians.
Calls for Stronger Social Support
Policy experts at the dialogue emphasized the need for stronger and more targeted social support programmes. To protect vulnerable households while the country adjusts to the new economic reality.
They also stressed that long-term economic reforms must be accompanied by job creation, improved infrastructure, and stronger welfare policies to help reduce poverty and improve living standards.
