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N20,000 monthly transfers can cut poverty, says W’Bank

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The World Bank has said Nigeria could lift up to 13.9 million people out of poverty if it implements a structured N20,000 monthly cash-transfer system targeted at poor households, warning that the country’s current safety-net programmes are too weak and underfunded to deliver meaningful relief.

The Bretton Woods institution delivered the verdict in a new report titled “The State of Social Safety Nets in Nigeria,” obtained by our correspondent on Friday. It urged an increase from the current disbursement of N5,000.

It said Nigeria’s social safety-net programmes are too poorly funded, weakly targeted, and inefficiently executed to deliver meaningful relief to the more than 100 million citizens living in extreme poverty. This comes after the bank revealed that only 44 per cent of total benefits from government-funded safety-net schemes actually reach poor Nigerians.

In its latest assessment, the bank noted that existing interventions “remain too small, too fragmented and too inefficient to move the needle on poverty,” despite the scale of economic hardship confronting millions of citizens.

“At their present scale and design, social protection programmes are simply not adequate to cushion vulnerable families or reverse the rising poverty trend,” the report stated.

It stressed that the combination of high inflation, shrinking household purchasing power, and limited beneficiary reach has weakened the impact of federal welfare spending.

According to the report, simulations show that expanding transfers to N20,000 per month, backed by stronger targeting and increased funding, “could dramatically reduce both the poverty headcount and the depth of deprivation among Nigeria’s poorest households.”

It added that with the right level of investment and a cleaner delivery system, “Nigeria has the potential to lift 13.9 million people out of poverty, more than double what current programmes can achieve.”

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According to the World Bank, simulations using Nigeria Living Standards Survey data show that safety nets could significantly reduce poverty and inequality if spending is increased and benefits reach their intended targets.

The bank examined spending scenarios ranging from N500bn to N2.4tn annually, with benefit levels of N5,000 to N20,000 per household per month. The results were striking. Under a clean, perfectly targeted system with zero leakage, N500bn, roughly Nigeria’s current allocation, could lift 3.3 million people out of poverty and cover nearly 70 per cent of the poor.

With N1.8tn (0.9 per cent of GDP), about 10.6 million Nigerians could be lifted out of poverty, while spending N2.4tn (1.2 per cent of GDP, the LMIC average) could lift 13.9 million people above the poverty line.

The report read, “While the impact of the safety net expenditure in Nigeria is negligible, the low impacts are driven by low and inadequate coverage and inefficient spending. Simulations using the NLSS 2018/19 data show that safety nets can have large impacts on poverty and inequality (measured by the depth of poverty) with larger overall expenditures and with efficient spending going directly to the poor.

“The simulations examine scenarios where the overall expenditures vary from N500bn, a very low scenario comparable to the current allocation, to N2.4tn, an ambitious scenario for Nigeria but one of average expenditures (relative to GDP) in other lower-middle-income countries. The simulations vary in benefit size per household from N5,000 to N20,000 per month. The simulations assume that the budget is spent exclusively on poor people, that is, without any targeting errors, leakage, or administrative and operational costs.

“The coverage is then determined by the data based on the budget and benefit size. Poverty impacts can be very significant even under the relatively low expenditures scenario, when spent efficiently. The simulations show that spending N500bn (about 0.2 per cent of GDP) on the poor, without any inefficiency or leakage, can lift 1.6 per cent (3.3 million people) out of poverty and cover close to 70 per cent of the poor. With higher levels of expenditure on the poor, especially expenditures exceeding N1.8tn (0.9 per cent of GDP), 5 per cent (or 10.6 million people) can be lifted out of poverty. With the lower-middle-income country average expenditures of 1.2 per cent of GDP (N2.4tn) on the poor, Nigeria can lift 13.9 million people out of poverty.”

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The bank urged the Federal Government to treat safety-net spending as an investment rather than a temporary palliative. “Scaling up cash transfers, particularly towards the N20,000 benchmark, represents one of the most efficient paths to reducing poverty in Nigeria,” it said, adding that wider coverage, not just higher benefit levels, would ensure more equitable relief for the millions living just below the poverty line.

It noted that while several interventions exist on paper, the impact of Nigeria’s welfare spending “remains negligible,” largely because too few poor households are covered and too much of the current funding leaks to non-poor beneficiaries. The bank urged Nigeria to prioritise wider coverage instead of concentrating large benefits on fewer households.

Its analysis shows that spreading N1tn across all poor households, even with smaller benefits, would lift about six million people out of poverty, compared to 5.8 million if the same amount were spent as N20,000 monthly transfers targeted at only one-third of poor households.

The broader coverage also reduces the depth of poverty more effectively, particularly for the millions of citizens just below the poverty line, who need only minimal support to cross it. The World Bank found that the poorest households, those far below the poverty line, remain untouched even by higher transfer amounts.

Under a perfect targeting system, N1tn spent on the poorest third would reduce poverty severity by 1.5 percentage points, nearly double the impact of randomly distributed transfers, but would have almost zero effect on headcount poverty because the poorest are too deep in deprivation to be lifted out with modest transfers.

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Earlier, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Federal Government plans to deliver digital cash transfers to 15 million households, estimated at 70 million Nigerians. He said 8.5 million households had already received at least one round of the N25,000 grant, with payments to the remaining 6.5 million expected before the end of the year.

Edun described the intervention as a cornerstone of the government’s strategy to cushion the impact of inflation and subsidy removal, but the World Bank report suggests the programme’s short duration and funding limits may not deliver long-term poverty reduction.

The World Bank concluded that Nigeria’s current safety-net architecture is incapable of driving the government’s poverty-eradication ambition unless urgent reforms are made.

It recommended three immediate steps, “Increase overall spending on safety nets, treating them as investments, not handouts, Expand coverage to reach more of the 100 million extremely poor Nigerians, Improve targeting and raise benefit levels to ensure transfers make a measurable impact.

“Nigeria’s safety nets, at their current funding level and implementation pattern, are too small, too narrow, and too diluted to meaningfully reduce extreme poverty,” the report declared.

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Revenue boom: World Bank faults states’ spending priorities, read full details

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The World Bank has criticised the spending priorities of Nigerian state governments, warning that increased revenues following recent economic reforms have not translated into proportionate investments in education, healthcare and social protection.

The global lender observed that although states had increased spending on essential public services, investments in transport infrastructure had grown considerably faster, even in states with poor human development indicators.

A Senior Economist at the World Bank Nigeria Office, Gloria Joseph-Raji, raised the concerns on Tuesday in Abuja during the launch of BudgIT’s 2026 State of States Report, themed ‘From Allocation to Impact: Rethinking State Spending Priorities.’

She said, “Spending on education, health, and social protection has also risen substantially, but it has not kept pace with the rapid growth in transport infrastructure spending, even in states with weaker human capital outcomes.”

Joseph-Raji explained that the bank’s October Nigeria Development Update, which examined budget implementation reports from all 36 states, found that governments had expanded transport infrastructure and reduced their debt burdens, particularly domestic debt, following increased fiscal allocations.

She attributed the revenue growth to petrol subsidy removal, exchange rate unification and improvements in tax administration since 2023, alongside federal intervention funds and the settlement of longstanding obligations to states.

According to her, the additional resources have enabled states to meet salary obligations and created opportunities for improved public service delivery.

However, she warned that excessive dependence on Federation Account allocations continued to expose state finances to fluctuations in federally shared revenue.

“In 2025, federation transfers accounted for more than three-quarters of revenue in all but a handful of states,” she said.

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She disclosed that federation transfers accounted for 73 per cent of aggregate state revenues between 2021 and 2025, excluding Lagos, while internally generated revenue was sufficient to cover recurrent expenditure in only two states.

Joseph-Raji noted that states received 26.72 per cent of net Federation Account revenues and now received 55 per cent of Value Added Tax revenue under the revised sharing formula.

Meanwhile, BudgIT’s Country Director, Vahyala Kwaga, disclosed that aggregate revenue across the 34 states covered in its comparative analysis rose from N4.99tn in 2022 to N15.53tn in 2025, representing an increase of N10.54tn.

He said FAAC allocations increased by more than 232 per cent, from N3.43tn to N11.38tn during the period.

Despite the revenue growth, Kwaga disclosed that the states had spent only N8.60tn, representing 24.4 per cent of their combined N35.22tn approved budgets, by June 2026.

“We must also examine how effectively they deploy the resources available to them, what they prioritise and whether their spending is delivering the outcomes that citizens need,” he said.

He explained that BudgIT had revised its assessment methodology to place greater emphasis on spending in education, healthcare, agriculture, water and sanitation, alongside revenue performance and debt sustainability.

Presenting the report, BudgIT’s Head of Research and Policy Advisory, Adejoke Akinbode, disclosed that total debt across the 35 states assessed increased by 10.41 per cent, from N10.57tn in 2024 to N11.67tn in 2025.

She identified Lagos as the most indebted state, with N2.9tn, while Osun spent N100.17bn servicing debt, equivalent to 28.6 per cent of its revenue.

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Akinbode said Lagos ranked first in overall fiscal sustainability, followed by Enugu, Bayelsa, Delta and Kebbi, while Cross River ranked last. Rivers was excluded because of inadequate fiscal data.

She urged states to reduce administrative costs, strengthen revenue collection and link borrowing to productive investments.

In her keynote address, an economist and lecturer at Amadeus University, Abia State, Dr Iboro Nelson, argued that rising government revenues had failed to compensate households for the economic hardship associated with recent reforms.

She disclosed that states collectively budgeted N1.32tn for healthcare in 2024 but spent N816.64bn, while education expenditure stood at N1.61tn against N2.41tn budgeted.

According to her, average annual spending per resident amounted to N3,483 on healthcare and N6,981 on education, equivalent to approximately N290 and N582 monthly, respectively.

“This is actually not fiscal space, but fiscal illusion,” she said.

Nelson blamed weak budget implementation, unrealistic expenditure projections, overlapping projects and excessive recurrent costs for the limited developmental impact of rising allocations.

Also speaking, a Programme Manager at the Ford Foundation’s West Africa Office, Joy Ehinor-Esezobor, urged governments to measure fiscal success by improvements in citizens’ lives rather than revenue growth or rankings.

“The ultimate measure of success should not simply be a better fiscal ranking, but better services and improved living conditions,” she said.

The programme is seeking to establish a framework for developing Nigeria’s underutilised small hydropower resources through private investment and public-private partnerships.

Source: punchng.com

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Otti woos US investors to Abia

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Governor Alex Otti of Abia State has concluded plans to bring investors, business leaders, policymakers, development partners, diplomatic representatives and entrepreneurs to the state to explore investment opportunities and strengthen commercial relations between Africa and the United States.

In a statement he signed and issued to newsmen on Sunday, the Chief of Staff to the Governor, Pastor Caleb Ajagba, disclosed that the Abia State Government had unveiled plans to attract American and other international investors to the state through the 2026 edition of the African Diaspora Conference and Expo, AFRICANDO, scheduled for this month.

Ajagba said, “AFRICANDO is a platform for translating international economic engagement into concrete investments and commercial partnerships. The state government is working with the organisers to ensure that the conference goes beyond speeches and networking to facilitate transactions, business agreements and sustainable investment.”

According to him, the 2026 edition, with the theme, “Deepening U.S.–Africa Commercial Ties in the Era of AfCFTA,” would connect investment opportunities in Abia and other African markets with American capital, technology, expertise and international distribution networks.

He added, “The African Continental Free Trade Area, AfCFTA, presents opportunities for African businesses to expand beyond their domestic markets, while international partnerships could help them improve production capacity and competitiveness.

“Abia is strategically positioned to benefit from the initiative because of its manufacturing and entrepreneurial base, particularly in Aba, which is known for indigenous manufacturing, commerce and craftsmanship.”

Ajagba added that Otti’s administration “is investing in infrastructure, strengthening public institutions and improving the business environment to position the state as a destination for private investment.”

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He explained that international delegates and prospective investors would be encouraged not only to attend conference sessions but also to visit strategic economic locations, manufacturing clusters, enterprises and government-backed projects to assess investment opportunities firsthand.

He said the approach was intended to give participants a practical understanding of the state’s economic potential and create opportunities for direct engagement with local businesses and relevant government agencies.

“AFRICANDO 2026 is not exclusively an Abia event. It is an international economic platform being hosted in Abia State,” he continued.

He listed agriculture and agro-processing, manufacturing, consumer goods, energy, financial services, healthcare, transportation and logistics, science and technology, artificial intelligence and emerging technologies among the sectors expected to receive attention.

A major feature of the conference, he said, would be a structured Deal Room and Investment Marketplace, where investment-ready projects from Abia and participating businesses would be presented to prospective investors.

Source: punchng.com

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Personal loans hit new high N1.99tn

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Nigerians’ outstanding personal loans increased by an estimated N58.5bn in the second quarter of 2026, reaching N1.99tn at the end of June, as households faced persistent inflationary pressures and high borrowing costs.

An analysis by The PUNCH of the Central Bank of Nigeria’s Second Quarter 2026 Economic Report showed that personal loans rose by 3.03 per cent from approximately N1.93tn recorded at the end of March.

The development came as total consumer credit increased by 3.26 per cent to N3.17tn from N3.07tn in the preceding quarter, representing an increase of about N100bn within three months.

The CBN stated, “Consumer credit outstanding increased by 3.26 per cent to N3.17tn, from N3.07tn in the preceding quarter. The increase reflected growth in both retail and personal loans, which rose by 4.10 per cent and 3.03 per cent, respectively.”

According to the report, personal loans accounted for 62.87 per cent of total consumer credit, while retail loans constituted the remaining 37.13 per cent.

This means that nearly N63 out of every N100 owed by consumers to financial institutions was classified as personal borrowing, highlighting its dominance in the consumer credit market.

Retail loans also increased by approximately N46.5bn to N1.18tn at the end of June, compared with an estimated N1.13tn in March, representing quarterly growth of 4.10 per cent.

Although retail loans recorded a faster percentage increase, personal loans contributed more to the outstanding stock of consumer credit.

The increase in personal borrowing occurred amid renewed inflationary pressures, which continued to affect household purchasing power.

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The CBN reported that headline inflation rose to 15.91 per cent in June 2026 from 15.38 per cent in March, reflecting increases in the prices of essential goods and services.

The report attributed the development largely to higher energy and commodity prices associated with geopolitical tensions in the Middle East, which increased production and transportation costs.

These conditions placed additional pressure on household expenditure, particularly for consumers whose incomes had not increased sufficiently to offset rising prices.

However, the report did not establish whether the increase in personal loans was driven primarily by household financial difficulties, consumption needs or improved access to credit.

The growth in consumer borrowing also occurred despite elevated lending rates in the banking sector.

 

 

According to the CBN, the average prime lending rate declined marginally to 19.01 per cent in Q2 from 19.37 per cent in the preceding quarter.

In contrast, the maximum lending rate increased slightly to 34.37 per cent from 34.34 per cent, indicating that borrowing remained expensive for some categories of bank customers.

Although these rates reflect broader banking sector lending conditions rather than specific personal loan charges, they provide an indication of the financing environment confronting borrowers.

A recent report ‘Enhancing Financial Inclusion & Advancement’ noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The ‘2026 Access to Financial Services in Nigeria Survey’ revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

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The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

Source: punchng.com

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