…Says Poverty Now Punishes Nigerians with Higher Costs for Food, Healthcare, Housing and Credit
The Chairman of the Alliance for Economic Research and Ethics Ltd/GTE, Hon. Dele Kelvin Oye, has called on the Central Bank of Nigeria (CBN) to impose interest rate caps on digital lending platforms, warning that millions of financially vulnerable Nigerians are being trapped in cycles of debt by loan apps charging effective annual interest rates exceeding 300 per cent.
In a statement titled “The Mathematics of Marginalization: Decoding Nigeria’s Poverty Premium,” Oye argued that Nigeria’s economic system increasingly forces poor citizens to pay more than wealthier Nigerians for essential goods and services, describing the trend as a structural failure that perpetuates poverty.
According to him, millions of Nigerians who cannot access affordable bank credit have turned to digital loan applications, only to face excessive interest charges, hidden fees and punitive penalties that worsen their financial situation.
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“In the complex economic landscape of Nigeria, a brutal mathematical reality persists: it is profoundly expensive to be poor. This phenomenon, known as the poverty premium, ensures that individuals with the least liquidity systematically pay the highest rates for basic goods, services and credit,” he said.
Citing World Bank data, Oye noted that about 41.82 per cent of Nigerians live below the international poverty line of $3 per day, while 47.03 per cent experience multidimensional poverty, making them particularly vulnerable to exploitative lending practices.
He cited examples of borrowers receiving loans of ₦65,000 but being required to repay ₦93,000 within seven days, with default penalties pushing the debt to as much as ₦158,000, creating what he described as an “inescapable poverty trap.”
According to Oye, the inability of poor households to purchase goods in bulk means they often pay higher prices for food than wealthier Nigerians, while limited access to preventive healthcare forces many families to delay treatment until illnesses become significantly more expensive to manage.
He added that the exclusion of millions of Nigerians from formal banking has left them with little choice but to depend on high-cost digital lenders.
“The formal banking sector largely excludes low-income earners who lack collateral, formal salary slips or credit histories. Consequently, many vulnerable Nigerians resort to digital loan platforms that frequently impose interest rates exceeding 300 per cent annually,” he stated.
Oye also highlighted Nigeria’s housing crisis, noting that many households spend between 40 and 50 per cent of their income on rent, while landlords’ demands for one or two years’ rent in advance further deepen financial hardship.
He urged the CBN and other regulators to introduce interest rate caps for digital lenders, strengthen consumer protection rules, improve access to affordable credit and expand financial inclusion initiatives.
According to him, broader reforms, including affordable housing, targeted social protection programmes and improved access to formal banking, are essential to break what he described as the country’s “poverty premium.”
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In a separate statement titled “The Unquestioned Pain: How Nigeria’s Lived Realities Are Becoming a Culture of Trauma and Why We Refuse to Accept It,” Oye warned that Nigeria’s poverty crisis is driving worsening social outcomes, particularly among children.
He said more than 115 out of every 1,000 Nigerian children die before their fifth birthday, linking the country’s high under-five mortality rate to poverty, malnutrition, inadequate healthcare and poor living conditions.
Oye argued that the effects of poverty extend beyond current economic hardship, creating an intergenerational cycle in which children inherit poor health, limited education and fewer economic opportunities.
He cited National Bureau of Statistics and World Bank figures indicating that approximately 133 million Nigerians live in multidimensional poverty, insisting that the country’s challenges stem more from structural weaknesses than a lack of natural resources.
“Nigeria is not a poor country; it is a wealthy country with poor people,” Oye said.
He called for urgent reforms to address the structural drivers of poverty, inequality and economic exclusion, warning that unless deliberate action is taken, millions of Nigerians will continue to face an economy where poverty itself carries the highest financial cost.
