About 63 percent of Nigerians fell below the poverty line following the removal of petrol subsidy, according to a new study presented at a stakeholders’ dialogue organised by the Agora Policy in Abuja.
The research, presented by a University of Abuja economist, found that the national poverty rate rose from about 49.8% to roughly 63% after the subsidy removal announced by President Bola Tinubu in May 2023. With the introduction of social protection measures such as cash transfers, the rate later moderated to about 56.2%.
The study attributed the surge in poverty to widespread price increases, particularly in fuel, transport and energy costs, which significantly reduced household purchasing power. Low-income households and rural communities were the most affected, while high-income groups remained relatively insulated.
It also found that household consumption declined across income groups after the subsidy removal and electricity tariff adjustments, although social transfers helped cushion the impact slightly.
While electricity tariff reforms led to a modest rise in consumer prices, they produced a small positive effect on economic output. In contrast, the removal of the petrol subsidy had a contractionary impact on economic activity due to rising inflation and transport costs.
The study concluded that although the reforms were necessary to address structural challenges in Nigeria’s economy, their implementation triggered significant short-term hardship for many households.
