Nigeria’s Poverty Crisis: A World Bank Perspective on the Deepening Divide.

George Omagbemi Sylvester | SaharaWeeklyNG.com

Half of Nigerians Are Now Poor And the Numbers Are Set to Worsen.

Introduction.
Nigeria, Africa’s most populous nation and one of its largest economies, stands at a crossroads. Despite abundant natural resources, trillions of naira in revenue and successive economic reform programs, nearly half of its population is trapped in poverty. The latest World Bank data paints a stark picture, 46% of Nigerians lived below the poverty line in 2024, with projections indicating that 52.5% could fall into extreme poverty by 2025. This is not merely a statistic; but a humanitarian crisis, a warning signal for policymakers and a stark indictment of decades of economic mismanagement.

The Stark Reality: Rising Poverty in Nigeria.
The World Bank’s October 2025 Poverty & Equity Brief underscores that Nigeria is sliding deeper into poverty. Food inflation, which disproportionately affects low-income households spending up to 70% of their income on essentials, has been a major driver. The depreciation of the naira has compounded the problem, making imports prohibitively expensive, squeezing household purchasing power and forcing millions into deprivation.

George O. Sylvester encapsulates this harsh reality with piercing clarity: “You cannot borrow your way out of poverty. You must produce your way to prosperity.” This statement resonates today more than ever. Successive governments reliance on external borrowing, often without creating productive industries or jobs, has left Nigeria with towering debt and a declining standard of living for its citizens. Production, entrepreneurship and wealth creation must replace borrowing as the engine for sustainable poverty alleviation.

Structural Barriers Hindering Poverty Reduction.
The World Bank’s 2022 Poverty Assessment highlights structural deficiencies that stymie progress. Nigeria suffers from sluggish economic growth, insufficient human capital development, weak labor markets and vulnerability to external shocks such as climate disasters and regional conflicts.

Economic growth, while occurring intermittently, has not been inclusive. Wealth remains concentrated among elites and in specific regions, while northern states face disproportionately high poverty levels. Infrastructure deficits, inadequate healthcare and underfunded education systems exacerbate inequality, creating a cycle where the poor remain trapped while the rich consolidate wealth.

Inflation and Currency Depreciation: Pushing Nigerians into Poverty.
The inflationary spiral in Nigeria has been brutal. Food prices have soared, energy costs have risen and the naira has lost substantial value against major currencies. This triple pressure has disproportionately impacted the poor. According to the World Bank, households already living near the poverty line are now being pushed below it, a phenomenon economists term “NEW POVERTY ENTRANTS.”

Professor Ngozi Okonjo-Iweala, former Nigerian Finance Minister, has consistently emphasized that currency stability, inflation control and domestic production are critical. Without addressing these factors, any attempt to reduce poverty through subsidies or borrowing is temporary and unsustainable.

The Role of Employment and Social Protection.
Social protection programs, while conceptually promising, have been undermined by poor targeting, corruption and inadequate funding. Programs like the National Social Investment Programmes (NSIP) have helped some communities, but millions of Nigerians remain excluded.

Simultaneously, the labor market fails to absorb new entrants, resulting in high unemployment and underemployment rates, especially among youths. A growing population of idle, educated youth becomes both an economic and social risk, fueling urban poverty, crime and social unrest.

Renowned economist Justin Yifu Lin observes, “Inclusive growth is the key to poverty reduction.” Economic expansion must be paired with deliberate policies to empower the poorest. Nobel laureate Amartya Sen adds that expanding individual capabilities through investment in education, healthcare and social infrastructure is central to sustainable poverty alleviation.

Regional Disparities: North vs. South.
The poverty divide between northern and southern Nigeria remains stark. Northern states face higher rates of extreme poverty, compounded by insecurity, poor infrastructure, low literacy levels and weak governance. Southern states, particularly in oil-rich regions, have higher income levels but also stark pockets of inequality.

Without deliberate interventions, these regional disparities will persist, creating long-term political, social and economic instability. The World Bank stresses the need for localized development policies, targeted social programs and investment in human capital to bridge this divide.

Debt Dependency vs. Productive Growth.
Nigeria’s debt-to-GDP ratio has risen sharply in recent years, largely to service budget deficits rather than fund productive sectors. This approach perpetuates a vicious cycle of borrowing temporarily plugs fiscal gaps but does not create jobs or industries, leaving poverty unabated.

Here, Sylvester’s quote resonates powerfully: “You cannot borrow your way out of poverty. You must produce your way to prosperity.” Any sustainable anti-poverty strategy must prioritize domestic production, value-added industries and entrepreneurship. Only through production-driven growth can Nigeria create employment, generate revenue and reduce dependence on loans.

Climate Change and External Shocks: Hidden Threats.
Nigeria’s vulnerability to climate change (manifested through flooding, desertification and agricultural disruption) directly impacts poverty. Poor households, largely dependent on subsistence farming, are hit hardest. Similarly, security crises, such as the Boko Haram insurgency and banditry in northern states, displace millions, disrupting livelihoods and deepening poverty.

The World Bank emphasizes that social protection alone cannot counter these shocks. Strengthening resilience through infrastructure investment, disaster preparedness and diversification of local economies is critical.

The Urgency of Reform: A Call to Action.
The World Bank’s reports are clear, Nigeria is at a tipping point. Without comprehensive reforms, poverty will become entrenched, with nearly 53% of Nigerians projected to live in extreme poverty by 2025.

Key measures include:

Boosting production and industrialization – to generate jobs and reduce reliance on imports.

Strengthening social protection programs – with precise targeting and sufficient funding.

Improving education and healthcare – to expand human capital and capabilities.

Controlling inflation and stabilizing the naira – to protect purchasing power.

Addressing regional disparities – through localized policies that prioritize underdeveloped areas.

As Sylvester warns, the path to prosperity is PRODUCTION-DRIVEN, not DEBT-DRIVEN. Borrowing may provide temporary relief, but only meaningful investment in productive sectors can create jobs, raise incomes and lift millions out of poverty.

The Bottom Line.
Nigeria’s poverty crisis is not inevitable; it is the product of policy failure, structural inefficiency and governance challenges. The World Bank’s data presents both a warning and an opportunity. Urgent, evidence-based reforms, focused on inclusive growth and production, are imperative. As George Omagbemi Sylvester states emphatically: “You cannot borrow your way out of poverty. You must produce your way to prosperity.”

The nation’s future depends on decisive action today; otherwise, millions of Nigerians will be condemned to poverty for generations.

How Nigerian Banks Built a N219 Trillion Asset Empire on Depositors’ Funds

BY BLAISE UDUNZE

In the first quarter of 2025, Nigeria’s 10 largest banks proudly reported a combined total asset base of N218.99 trillion, up from N212.75 trillion at the end of 2024, according to a report by Nairametrics published on May 19, 2025.

On paper, it looked like a victory as evidence that the sector remains robust despite inflationary headwinds, exchange rate volatility, and a struggling real economy. But beneath that glossy narrative lies a deeper, more uncomfortable truth that reveals Nigeria’s asset boom is not driven by innovation, real-sector productivity, or capital efficiency; rather, it is fueled largely by customer deposits and balance-sheet inflation.

According to data from the banks’ own filings, about N164.7 trillion, representing roughly 75.2 percent of the N218.99 trillion total asset base, came directly from customers’ deposits. In plain terms, three-quarters of the industry’s celebrated “assets” are actually liabilities owed to the public, which are deposits that banks temporarily hold, not capital they generated or invested productively.

Bank Customer Deposits (N Trillion)

Access Holdings / Access Bank 38.8655

Ecobank (Group) 33.2080

Zenith Bank 22.6818

United Bank for Africa (UBA) 25.6500

FBN Holdings / FirstBank Group 17.2699

GTCO (Guaranty Trust) 10.8923

Fidelity Bank 6.5990

FCMB Group 4.1254

Stanbic IBTC 3.0456

Wema Bank 2.4096

Total N164.75 trillion

This dependency on depositors’ funds reveals a system that looks rich in assets but is, in essence, shallow in innovation and weak in capital depth. At first glance, the growth appears dramatic, with the sector’s total assets jumping from N170.02 trillion in 2024, representing a 39.6 percent year-on-year rise, to nearly N219 trillion by Q1 2025. Yet, this “growth” is misleading. Much of it stems not from new value creation but from naira devaluation adjustments, inflationary expansion, and paper gains on government securities.

Banks are becoming bigger on paper, not stronger in impact. The so-called asset expansion has not translated into more affordable credit for manufacturers, small and medium enterprises (SMEs), or agribusinesses. Instead, it reflects a financial system more comfortable with passive wealth storage than active economic stimulation.

In simpler terms, Nigeria’s banks are becoming richer without making the economy stronger. Their balance sheets have ballooned, but their capital efficiency, which represents the ability to convert deposits into productive loans, remains weak.

The false appearance of size becomes even more striking when placed in a continental context. As of June 30, 2025, Standard Bank Group of South Africa, Africa’s largest financial institution, reported total assets of R3.4 trillion, equivalent to $191.8 billion. At Nigeria’s prevailing exchange rate of N1,484.50 to $1, that translates to approximately $191.8 billion × N1,484.50 = N284,983 trillion, or roughly N285 trillion. That means a single South African bank now outvalues the entire Nigerian banking industry, whose 10 largest lenders collectively hold N218.99 trillion in assets.

The comparison is humbling. It highlights how Nigeria’s asset numbers, while massive in naira terms, shrink dramatically when viewed through a global lens. While Standard Bank’s strength stems from robust capitalization, efficient risk management, diversified income streams, and strong regional investments, Nigerian banks remain largely driven by deposit inflows, short-term instruments, and FX revaluation surges.

Moreover, the disconnect between banking prosperity and economic stagnation is becoming impossible to ignore. Despite N219 trillion sitting on bank balance sheets, access to credit for manufacturers, small businesses, and startups remains prohibitively difficult. Lending rates are high, collateral demands are steep, and real-sector credit continues to shrink as a share of GDP. Manufacturing’s contribution to GDP remains in low single digits, private sector credit lags behind African peers, and inflation continues to erode the value of naira-denominated deposits. The banks’ “assets” may rise, but they are paper assets, not productive capital, rather figures that comfort shareholders but fail to transform society.

A banking system overly reliant on deposits is inherently fragile. Deposits are short-term and confidence-sensitive and can flee quickly during periods of policy uncertainty. Unlike equity or long-term capital, they offer little cushion against shocks. This overdependence creates an illusion of liquidity but hides structural weakness. Nigeria’s banks may look stable, but their foundations are vulnerable, just like a tower built on shifting sands of depositor confidence rather than the rock of sustainable capital formation.

For Nigeria’s regulators, analysts, and policymakers, the question is no longer how large the banks’ assets appear, but what those assets are doing for the economy. True strength must come from innovation in financial intermediation, capital efficiency, and credit diversification; support for real-sector growth; and regional competitiveness on the African and global stage.

Until Nigerian banks start to convert deposits into genuine development by funding infrastructure, technology, and enterprise, the industry’s trillion-naira balance sheets will remain a false hope of progress without prosperity. Nigeria’s N219 trillion banking booms may glitter, but it is a reflection of financial inflation, not economic transformation. When one South African bank commands more assets than the entire Nigerian industry combined, it is not just a comparison; it is a revelation.

It reveals how far Nigeria must go to move from deposit dependency to capital creation, from paper prosperity to real productivity, and from illusory balance sheet growth to genuine economic strength. Until that shift happens, Nigeria’s banking system will remain what it is today as a trillion-naira illusion shimmering over a weak economic base.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

ZENITH BANK SIGNALS STRONG FULL-YEAR OUTLOOK WITH N51.3 BILLION INTERIM DIVIDEND PAYOUT

Zenith Bank Plc, on Friday, October 10, 2025, made good on its promise as it paid a total interim dividend of N51.3 billion to its shareholders for the Half Year (H1) 2025, at N1.25 per share. This significant payout represents an increase of over 60% from the N31.4 billion paid in H1 2024, demonstrating the bank’s commitment and enhanced capacity to continually generate value for its shareholders amidst a challenging macroeconomic environment.

The dividend payment follows the bank’s audited financial results for the half year ended June 30, 2025, released to the Nigerian Exchange (NGX) in September 2025, which showcased a robust financial position and strong growth trajectory.

Commenting on the dividend payout, the Group Managing Director/CEO, Dame Dr. Adaora Umeoji, OON, said:

> “We are pleased to have paid this significant interim dividend to our valued shareholders. Our half-year results underscore our resilience and commitment to our stakeholders. Based on the momentum achieved in H1, we are confident in our full-year outlook and expect to exceed shareholders’ expectations by year-end.”

The substantial dividend payout reflects the bank’s exceptional underlying performance, as it recorded a robust 20% year-on-year increase in gross earnings, rising from N2.1 trillion to N2.5 trillion in H1 2025. Interest income drove this performance with an impressive 60% growth, climbing from N1.1 trillion to N1.8 trillion. The bank achieved this increase through the strategic repricing of risk assets and effective treasury management.

The bank’s total assets also expanded to N31 trillion in June 2025, representing steady growth from N30 trillion in December 2024, underpinned by a robust and well-structured balance sheet. Customer confidence remained strong, with deposits growing by 7%, from N22 trillion to N23 trillion in June 2025.

Zenith Bank’s shareholders can be assured of the bank’s continued focus on delivering exceptional value and growth, driven by its strong financial fundamentals and strategic initiatives.

The bank’s consistent track record of excellent performance has continued to earn it numerous awards, including recognition as the Number One Bank in Nigeria by Tier-1 Capital for the sixteenth consecutive year in the 2025 Top 1000 World Banks Ranking published by The Banker, and as “Nigeria’s Best Bank” at the Euromoney Awards for Excellence 2025.

The bank was also awarded Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards for 2020, 2022, and 2024; Best Bank in Nigeria from 2020 to 2022, 2024, and 2025 in the Global Finance World’s Best Banks Awards; Best Bank for Digital Solutions in Nigeria at the Euromoney Awards 2023; and was listed among the World Finance Top 100 Global Companies in 2023.

Further recognitions include Best Commercial Bank, Nigeria for five consecutive years from 2021 to 2025 in the World Finance Banking Awards, and Most Sustainable Bank, Nigeria in the International Banker 2023 and 2024 Banking Awards. Additionally, Zenith Bank has been acknowledged as the Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards for four consecutive years from 2022 to 2025, and “Best in Corporate Governance – Financial Services, Africa” for four consecutive years from 2020 to 2023 by Ethical Boardroom.

The bank’s commitment to excellence also saw it named the Most Valuable Banking Brand in Nigeria in The Banker’s Top 500 Banking Brands for 2020 and 2021, Bank of the Year (2023–2025) at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards, and Retail Bank of the Year for three consecutive years from 2020 to 2022 and 2024 to 2025 at the BAFI Awards. The bank also received the accolades of Best Commercial Bank, Nigeria and Best Innovation in Retail Banking, Nigeria in the International Banker 2022 Banking Awards.

Zenith Bank was further named Most Responsible Organisation in Africa, Best Company in Transparency and Reporting, and Best Company in Gender Equality and Women Empowerment at the SERAS CSR Awards Africa 2024; Bank of the Year 2024 by ThisDay Newspaper; Bank of the Year 2024 by New Telegraph Newspaper; and Best in MSME Trade Finance 2023 by Nairametrics. The bank’s Hybrid Offer was also adjudged “Rights Issue/Public Offer of the Year” at the Nairametrics Capital Market Choice Awards 2025.