The World Bank has again ranked Nigeria among the Lower-Middle Income Economies (LMIEs), placing Africa’s top oil producer behind conflict-ridden Libya and Gabon which were categorized as Upper-Middle Income Economies (UMIEs).
This ranking comes as the country recently embarked on key reforms that have shrunk disposable income and triggered the worst cost-of-living crisis in a generation.
But the tides are calming as Nigeria recorded its fastest annual growth in more than a decade in 2024 which stood at 3.4 percent with analysts predicting a sustained trajectory this year.
According to the Washington-based lender, Nigeria’s Gross National Income (GNI) per capita remains below the $1,136 threshold, qualifying it as a lower-middle income economy. This is as its per capita income also remains tepid at about $900.
Meanwhile, African nations such as Libya, Gabon, Algeria, Botswana, Equatorial Guinea, Mauritius, and South Africa with small populations boast higher GNI per capita, placing them in the upper-middle income bracket between $4,496 to $13,935.
The World Bank Group said that its income classifications provide valuable insights into global economic trends and development progress, urging leaders to adopt it in policymaking.
“As countries continue to evolve economically, these classifications will remain crucial for shaping development policies and strategies. Policy makers should consider these classifications when designing economic policies and strategies, the multilateral lender said.
“Understanding the factors influencing income classification can guide efforts stimulating economic growth, help manage inflation, and enhance integration into the global economy.”
Nigeria has made efforts in overhauling its economy after President Bola Tinubu scrapped costly fuel subsidies and the central bank unifying the exchange rate to dismantle the arbitrage and opacity in the FX market.
It has equally signed four key tax reform bills which are expected to, among other things, boost revenue, improve business conditions, slow inflation and increase purchasing power of the citizens.
Despite these strides, Nigeria still lag behind in the income rankings, indicating that various reforms by the authorities have yet to improve citizens’ pay even as the government increased the country’s minimum wage by 133 percent last year.
The report also stated that Nigeria was among countries in fragile and conflict affected situations alongside Yemen, Ukraine, Gaza, West Bank, Sudan, South Sudan, Somalia, Syria, Niger, Burkina Faso and Afghanistan, among others.
However, it was not included among the heavily indebted poor countries, which included Rwanda, Ghana, Gambia, Liberia, among others.
Across Sub-Saharan Africa, low-income countries saw the biggest decrease from 75 per cent to 45 per cent, with only one country, Seychelles, reaching high-income status.
