In its December 2023 Nigeria Development Update (NDU) report, the World Bank highlighted that the removal of import restrictions in Nigeria has the potential to lift approximately 1.3 million people out of poverty. The report commended the Central Bank of Nigeria’s decision to lift foreign exchange prohibitions on 43 items, including rice, fertilizer, and cement, deeming it pro-poor and beneficial for consumer welfare.
The report stated that import restrictions disproportionately affect goods consumed more by poorer households, citing rice as a staple food for about 84% of Nigerian households. Recent estimates by the World Bank suggest that lifting import restrictions could reduce the prices of affected items by 4.7%, leading to increased purchasing power and lifting people out of poverty.
The World Bank identified certain states that would benefit more from the positive impacts of poverty reduction resulting from the removal of import bans. The largest beneficiaries include Kaduna, Ekiti, Enugu, FCT, Kwara, Anambra, Adamawa, Cross River, and Kebbi. Conversely, the smallest beneficiaries are identified as Rivers, Akwa Ibom, Ondo, Abia, Imo, and Ebonyi.
Overall Economic Reforms:
While acknowledging that the removal of import restrictions may pose challenges to certain sectors, the World Bank urged the Nigerian government to reduce the overall cost of doing business and implement complementary reforms to support the country’s structural agenda, competitiveness, and economic diversification.
Impact on Poverty Trends:
The report also discussed the impact of recent reforms on poverty trends, noting that about 24 million Nigerians became poor between 2018 and 2023. The total number of poor individuals increased from 79 million to 104 million during this period. The World Bank expects the recent reforms to slowly reverse this trend from 2024 onward, with poverty rates decreasing from 46% in 2024 to 44% in 2026, driven by higher growth and lower inflation.