Connect with us

Business

Poverty rate jumps to 63% after subsidy removal – Report

Published

on

About 63 per cent of Nigerians fell below the poverty line after the removal of petrol subsidy, according to a new study that examined the welfare impact of the country’s recent economic reforms.

The research, presented at a stakeholders’ dialogue organised by Agora Policy in Abuja on Thursday, showed that the national poverty headcount rose sharply from a baseline of about 49.8 per cent to roughly 63 per cent following the subsidy removal before moderating slightly after the introduction of social protection measures.

The dialogue, themed “Sustaining and Deepening Economic Reforms in Nigeria,” brought together policymakers, economists, civil society leaders, and private sector representatives to examine the effects of the Federal Government’s reform agenda.

Among those present were the Deputy Governor for Economic Policy at the Central Bank of Nigeria, Dr Muhammad Abdullahi; the Special Adviser to the President on Finance and Economy, Ms Sanyade Okoli; the World Bank Senior Economist for Nigeria, Dr Samer Matta; the Country Director of CARE International, Dr Hussaini Abdu; and the Executive Director of Agora Policy, Waziri Adio, among others.

The study, presented by a Senior Lecturer at the  Department of Economics, University of Abuja, Dr Mohammed Shuaibu, analysed the economic and social consequences of key reforms introduced by the Federal Government, including the removal of petrol subsidy and adjustments in electricity tariffs.

President Bola Tinubu had announced the end of petrol subsidy during his inaugural address on May 29, 2023. According to the study, the policy triggered broad price increases across the economy and significantly affected household welfare. “After the subsidy removal, poverty increased from a baseline of about 50 per cent to 63 per cent,” Shuaibu said.

He added that the introduction of social protection measures helped moderate the impact but did not fully reverse the deterioration in welfare conditions. “However, when social protection measures such as cash transfers were introduced, the poverty rate moderated to around 56.2 per cent,” he said.

The findings indicated that the immediate effects of the reform were unevenly distributed across different income groups. While high-income households remained largely insulated from the shocks, low-income households experienced the most severe erosion of purchasing power.

Data from the study showed that poverty among low-income households rose sharply from about 50 per cent before subsidy removal to roughly 63 per cent afterwards, while the national poverty gap widened significantly.

The poverty gap at the national level increased from 31.6 per cent to more than 45 per cent following the policy change, indicating a deeper level of deprivation among poor households.

See also  Price of a bag of rice has crashed - Finance Minister, Wale Edun

Although social transfers slightly reduced the gap, the improvement remained limited due to delays in the rollout of intervention programmes and the relatively small scale of support provided.

The study also assessed how the reforms affected household consumption patterns. According to the findings, consumption levels declined across income groups following the removal of the subsidy and the adjustment of electricity tariffs.

“Across the board, household consumption declined following both the subsidy removal and electricity tariff adjustments. However, social transfers helped cushion the impact, especially for low-income households,” Shuaibu said.

The analysis showed that the effect on consumption was particularly pronounced among rural and low-income households, where rising energy and transport costs significantly reduced spending capacity.

Households in urban low-income groups also experienced declines in consumption, although the impact was somewhat moderated where social transfers were introduced.

Beyond household welfare, the research also examined the broader macroeconomic consequences of electricity tariff reforms.

The study found that electricity tariff adjustments resulted in a modest increase in consumer prices, initially raising prices by about 0.26 per cent, which later rose to roughly 0.52 per cent after the inclusion of social protection measures.

However, the electricity reform produced a small positive impact on economic output. According to the analysis, real Gross Domestic Product increased by about 0.42 per cent under the reform scenario before moderating to around 0.21 per cent when social protection programmes were factored into the model.

Firm-level investment also recorded slight gains following electricity tariff adjustments, although these improvements were partly offset by the cost of implementing social protection measures.

In contrast, the removal of the petrol subsidy had a contractionary effect on economic activity. The study showed that rising fuel prices and transport costs triggered inflationary pressures that weighed on business activity and investment.

Beyond the quantitative modelling, the research incorporated insights from focus group discussions conducted across Nigeria’s six geopolitical zones. These discussions involved households and businesses and provided qualitative evidence on how Nigerians were coping with the economic changes.

Participants generally acknowledged the need for reforms given the country’s fiscal and macroeconomic challenges, but many criticised the speed at which the policies were introduced.

Households reported that the reforms rapidly eroded purchasing power and forced many families to adopt survival strategies. “Households adjusted to the shocks not through recovery but through sacrifice,” Shuaibu said.

According to the study, many households responded by cutting consumption, reducing transport use, rationing electricity, and borrowing money to meet basic needs. Several respondents also said they had received little or no assistance from government support programmes designed to mitigate the effects of the reforms.

Businesses reported similar difficulties, noting that rising fuel and electricity costs significantly increased operating expenses. Some firms said they had been forced to raise prices, reduce staff strength, or shut down operations entirely.

See also  Nigeria tops Africa in petrol price surge during US-Iran war

Others reported switching to alternative energy sources to cope with rising electricity tariffs and fuel costs. However, many business owners said that promised government support programmes had either not reached them or were insufficient to offset rising costs.

The study concluded that while the reforms were necessary to correct structural distortions in the Nigerian economy, their implementation created severe short-term shocks.

Providing a monetary policy perspective at the dialogue, the Deputy Governor of the CBN for Economic Policy, Muhammad Abdullahi, said the reforms became unavoidable because the Nigerian economy had been weakened by deep structural distortions.

“Nigeria faced severe macroeconomic imbalances, economic distortions, and collapsing revenues before major reforms began,” he said.

According to Abdullahi, the country had suffered a dramatic decline in oil revenue over the past decade.

He disclosed that earnings from crude oil fell from about $92bn in 2012 to less than $2bn in 2023, representing a decline of nearly 98 per cent in expected revenue during the period.

The situation, he said, contributed to severe fiscal pressure and made policy reforms unavoidable. The CBN official also noted that Nigeria inherited major distortions in the foreign exchange market, including multiple exchange rate windows that encouraged arbitrage.

According to him, the subsidy regime and exchange rate distortions together were estimated to have cost the Nigerian economy about six per cent of its Gross Domestic Product.

Abdullahi also disclosed that the CBN inherited a backlog of about $7bn in foreign exchange obligations owed to businesses and investors. He said the apex bank had already cleared about $4.5bn of the backlog in an effort to restore confidence in the financial system.

He added that restoring confidence in the foreign exchange market and improving oil sector performance were critical to stabilising the economy. Abdullahi also said Nigeria’s foreign reserve position was weaker than it appeared before the reforms.

Although official reserves were reported to be about $32bn, he explained that much of the funds consisted of borrowed resources and swaps, leaving the country with net reserves of only about $800m.

See also  Malabu Oil & Gas Sues CAC Over Deregistration Of Firm

Despite the difficult transition, he said the reforms were beginning to produce early results. According to him, inflation has been declining steadily for about 19 months, while food inflation is currently at its lowest level in about 13 years.

He added that Nigeria was gradually moving towards single-digit inflation, something the country has not achieved in more than a decade. Abdullahi further stated that net foreign reserves had improved significantly, rising from about $800m to roughly $32bn, a development he said had strengthened international investor confidence.

He also pointed to rising non-oil exports, which reached about $6bn last year, with the government targeting $12bn in the near future.

Also speaking at the dialogue, the Director-General of the Lagos Chamber of Commerce and Industry, Dr Chinyere Almona, said the reforms had corrected several long-standing distortions but had also placed heavy pressure on businesses.

Almona noted that the removal of petrol subsidy alone could save the government about $7.5bn annually, which should be invested in infrastructure and human capital development. “For the private sector, what we want to see is that the savings from the fuel subsidy removal are actually being used to fund infrastructure,” she said.

She explained that rising fuel prices had significantly increased electricity generation costs for businesses. Almona added that while macroeconomic indicators such as reserves and the balance of payments had improved, many Nigerians had yet to experience the benefits.

“The economy is improving at the macro level, but that improvement has not trickled down to the common man and many small businesses,” she said.

She therefore urged the government to introduce complementary policies that would support businesses, including improved access to credit and targeted assistance for small and medium-sized enterprises.

The Chair of Agora Policy, Ojobo Ode Atuluku, said the dialogue was organised to promote evidence-based discussion on Nigeria’s reform agenda. He explained that the initiative was supported by the Nigeria Economic Stability and Transformation programme and the United Kingdom’s Foreign, Commonwealth and Development Office.

World Bank economist Samer Matta urged the government to expand social protection programmes and strengthen the National Social Register to ensure that assistance reaches vulnerable populations quickly.

He added that sustained dialogue and stronger safety nets would be critical to maintaining public support for Nigeria’s economic reforms and ensuring that growth becomes more inclusive.

punch.ng

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Access Holdings Board approves H1 2026 financials

Published

on

The Board of Directors of Access Holdings Plc has approved the Group’s audited interim consolidated and separate financial statements for the half-year ended 30 June 2026.

The decision was taken during the board’s meeting held on 27 August 2026, marking a significant step in the group’s financial reporting calendar.

“The financial statements were considered and approved by the Board at its meeting held on 27 August 2026 and will now proceed through the required regulatory process, including approval by the Central Bank of Nigeria,” the company announced in a statement following the meeting.

The approval clears the path for the financial institution to move into the final administrative phase of its mid-year audit process, as the group must secure statutory sign-off from the apex bank before the results can be released to the investing public.

“Following receipt of the CBN’s approval, Access Holdings will publish the audited financial statements through the Nigerian Exchange Limited and make them available to shareholders, investors and other stakeholders through the Group’s established communication channels,” the company added.

Outlining the core principles driving its financial disclosure, the group emphasised its commitment to regulatory compliance and operational transparency across its global operations.

“The process reflects Access Holdings’ commitment to strong governance, regulatory compliance and transparent engagement with its stakeholders as it continues to build a more connected and resilient financial services group serving Africa and its international markets,” the statement noted.

In adherence to capital market rules, Access Holdings confirmed that restrictions on share trading by internal stakeholders remain strictly in force.

See also  Nigeria’s eight-month debt service bill hits $2.86bn – CBN

“In accordance with the NGX Issuers’ Rules, Access Holdings will remain in a closed period until 24 hours after the audited financial statements have been released to the public,” the company stated.

The institution concluded with a clear directive regarding trading boundaries for key insiders: “During this period, directors, insiders and their connected persons are prohibited from dealing, directly or indirectly, in the securities of Access Holdings Plc.”

The public market release of the audited statements on the NGX is expected shortly following the completion of the CBN’s review process.

In the Nigerian banking sector, Tier-1 financial institutions like Access Holdings are subject to regulatory oversight by the CBN and the NGX, requiring commercial banks and holding companies to submit interim and annual financial statements to the apex bank for formal review and approval before public dissemination.

This vetting process ensures systemic risk management, compliance with capital adequacy standards and accurate representation of non-performing loans across multi-jurisdictional operations.

Capital market rules enforced by the NGX also require listed entities to observe a closed period prohibiting directors, key management personnel and connected insiders from trading the company’s shares to prevent insider trading and ensure market fairness while price-sensitive financial information awaits regulatory clearance.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

Pension inflows surge 42% despite idle accounts

Published

on

Quarterly contributions into the Personal Pension Plan rose 42.46 per cent to N147.16m in the first quarter of 2026, up from N103.30m recorded in the fourth quarter of 2025, The PUNCH has learned.

Data obtained from the National Pension Commission’s Q1 2026 pension industry report revealed that the N43.86m surge pushed cumulative contributions under the scheme to N1.66bn since inception.

Reacting to the increase in revenue despite low participation, Lagos-based stock market trader and pension analyst Ade Ojapa said the figures highlight both progress and persistent structural challenges.

“The 42 per cent increase in quarterly inflows demonstrates that active participants are beginning to deposit larger volumes, but the sheer volume of dormant accounts shows that initial onboarding is failing to translate into financial commitment,” Ojapa said.

However, the PenCom report highlighted a severe structural deficit, revealing that 91.4 per cent of registered accounts under the scheme remain dormant.

Out of 219,316 total registrations recorded from inception to Q1 2026, only 18,811 accounts (8.6 per cent) were funded with active Retirement Savings Accounts.

Conversely, 200,505 registered accounts have received zero financial contributions.

The figures underscore a persistent hurdle for the regulator: converting initial registrations into active, recurring pension contributions among informal sector participants.

Explaining the operational realities behind the figures, a member of the Pension Fund Operators Association of Nigeria noted that economic conditions heavily dictate compliance among informal workers.

“Unlike formal sector employees whose contributions are deducted at source by employers, informal workers must manually transfer funds while managing unpredictable daily incomes,” the official said, requesting anonymity. “When headline inflation squeezes household budgets, voluntary long-term savings are usually the first casualty.”

See also  Report reveals that Dangote sourced 22% of June crude from overseas, 78% from indigenous producers

Launched under the Micro Pension Plan framework, the initiative was designed by PenCom to extend the Contributory Pension Scheme to self-employed individuals and workers operating within Nigeria’s vast informal economy.

Unlike formal sector employees who benefit from mandatory employer-employee co-contributions under the Pension Reform Act 2014, informal sector contributors participate voluntarily. To encourage uptake, the plan allows flexible contribution schedules and grants contributors access to 40 per cent of their accumulated funds for contingent withdrawals prior to retirement, while the remaining 60 per cent is locked strictly for retirement benefits.

Nigeria’s informal sector accounts for an estimated 80 per cent of the national workforce, representing a critical frontier for pension expansion and financial inclusion.

Offering a path forward for the regulator and operators, financial inclusion advocate and economist, Dr. Kemi Ojo, emphasised the need for technological integration and field-level engagement.

“To convert those 200,000 dormant accounts into active income streams, PenCom and PFAs must partner with microfinance institutions and trade unions to automate micro-deductions. Mobile USSD channels and daily micro-contributions are essential if we expect informal earners to build lasting retirement safety nets,” Ojo asserted.

While the 42.46 per cent quarterly jump in contributions signals encouraging momentum among active depositors, stakeholders emphasise that aggressive sensitisation and digitised collection channels will be crucial to activating the 200,505 idle accounts across the country.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

Ajah-Lekki markets, facilities face waste compliance enforcement

Published

on

The Lagos Waste Management Authority has identified a number of markets, commercial and institutional facilities across the Ajah-Lekki Axis for compliance enforcement over persistent violations of waste management requirements and other environmental regulations.

The Director of Public Affairs at LAWMA, Mukaila Sanusi, disclosed this in a recent statement obtained by The PUNCH.

Speaking on the development, the Managing Director/Chief Executive Officer of LAWMA, Dr Muyiwa Gbadegesin, disclosed that the identified facilities include Kodak Moment, Bayrock Lifestyle, Caelum Nigeria Ltd, Alpha Pharmacy, Amazon Farm, Ramayaa Mall, Simply Africa Place, Aries Safia, Wolly Mall, Delightful Toy Shop and New Creation Church.

“Others include The Logic Church, Dow Eye Clinic, Time Oak Hotel, L OMP, Furniture House, Fashion Design Factory, De Phantom Hotel, Elizade Motors, Trinity, Living Faith Church, Premium Rentals, Christ Chapel Church and QMB Mart,” Gbadegesin said.

He added that the facilities had been identified for compliance enforcement following observed violations.

“We have continued to engage and monitor facilities to secure compliance, but where establishments continue to default after being given the opportunity to comply, we will take the necessary enforcement measures. Our responsibility is to ensure that commercial activities do not compromise proper waste management or the right of residents to a clean and orderly environment,” he stressed.

Gbadegesin said that LAWMA would continue to combine engagement and improved waste management services with firm compliance enforcement.

He stressed that operators within the corridor were expected to meet their waste management obligations.

He urged businesses, markets, institutions and residents to comply with approved waste management requirements and cooperate with LAWMA’s enforcement teams.

See also  Report reveals that Dangote sourced 22% of June crude from overseas, 78% from indigenous producers

The LAWMA boss noted that sustained compliance was essential to preventing indiscriminate dumping, protecting public spaces and maintaining a cleaner environment.

He reaffirmed LAWMA’s commitment to sustained monitoring, enforcement and stakeholder engagement to promote proper waste management and environmental compliance across Lagos State.

The development followed a monitoring and enforcement exercise conducted on Tuesday, 25 August 2026, by the LAWMA Project WISE team in collaboration with officials of the Kick Against Indiscipline, military personnel and the Nigeria Police at the Eleganza and Issa Imamu Market areas of Ajah.

At Eleganza, the enforcement team dislodged illegal structures erected along road corridors and pedestrian walkways by traders, which had obstructed the movement of motorists and pedestrians, while Issa Imamu Market was sealed following persistent indiscriminate disposal of waste along the roadside.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Trending