In the shadow of Nigeria’s poverty statistics, where nearly two-thirds of citizens live on less than $2 a day, a quieter revolution is underway. In the dry-season heat of Benue State, a farmer rises at dawn to tend his maize and guinea corn. After each harvest, he sells part of his yield, feeds the rest to his livestock and uses their manure to fertilize the next crop. These animals double as savings and are sold once school fees are due. He has no insurance, no grant and no bank account, yet this quiet rhythm of work sustains his family.

Across Nigeria, millions live the same pattern of improvised survival. They are market women in Akwa Ibom, backyard gardeners in Borno and roadside tailors in Lagos. Their livelihoods may be invisible to the formal economy, yet they are fueling what researchers at the Institute of Development Studies (IDS) describe in their 2025 policy briefing, Growth from Below: Poverty Reduction beyond Social Protection in Nigeria, as the country’s most overlooked engine for poverty reduction.

Poverty Reduction in Nigeria

Nigeria’s economy, though the fourth largest in Africa by GDP, continues to grow too slowly to match its expanding population.

Since 2014, GDP per capita has stagnated, and inflation remains high, driven by soaring food and fuel prices. The International Monetary Fund (IMF) projects a modest 3% growth in 2025, below the continental average of 4%. For many Nigerians, these numbers translate into hunger. “Over a decade, Nigeria has experienced various shocks—political conflict, climate recurrence, floods, droughts and multiple economic crises,” Vidya Diwakar, deputy director at IDS’s Chronic Poverty Advisory Network, told The Borgen Project in a Zoom interview. “What we found is that many people tend to escape poverty through these informal investments.”

In 2023, the federal government declared a “state of emergency on food security” and launched large-scale farming initiatives. Dozens of programs, including MSME funds, skill-up training and tractor schemes, were rolled out to stimulate production.

But Dr. Stanley Ukpai, a CPAN researcher, told The Borgen Project in a Zoom interview that such interventions often overlook the informal economy. “We tend to see this approach to poverty alleviation where the government is making large investments,” he said, “but many times these investments don’t translate to substantial changes at the community and grassroots levels.”

The Rise of Growth from Below

That reality is at the heart of new IDS research, Growth from Below: Poverty Reduction beyond Social Protection in Nigeria (2025). Kareem Abdulrasaq, lead author of the study, told The Borgen Project in an interview: “There is no assistance; they still do it by themselves,” he explained. “It’s forms of agriculture, petty trading, livestock rearing and food processing—activities families created to survive, whether during a crisis or after it. This is what ‘growth from below’ really means.”

The study argues that household-level economic activity, not top-down welfare, has become Nigeria’s most effective engine of poverty reduction.

In Benue State, some farmers reinvest crop income to buy land and build homes. In Borno, a widow displaced by Boko Haram began growing vegetables to feed her children and sell at the market. In Akwa Ibom, a mother installed a palm oil press in her compound, turning a family tradition into income.

Across Nigeria, informal entrepreneurship functions as a safety net where formal systems fail. The IDS research highlights how these forms of resilience are now key drivers of poverty reduction. “Informal economies have historically been viewed as a cushion during crises,” Diwakar told The Borgen Project, adding that success should be measured by whether such enterprises enable sustained upward mobility through greater productivity.

Women at the Center

From roadside vendors to small processors, women make up the majority of micro-entrepreneurs. Yet policy is rarely on their side.

“The government is doing quite a lot,” said Ukpai, “but at the top level, there are these processes that don’t translate down to the communities. There’s a disconnect between policies on paper and real implementation at the grassroots.”

The IDS brief underscores this imbalance. While some social protection programs have offered women cash transfers or training, their coverage is inconsistent and short-lived. When the payments stop, many families fall back into poverty. Without legal recognition or access to formal finance, women rely on informal loans, often with high interest, to sustain their businesses.

One Akwa Ibom entrepreneur captured the dilemma: “I struggled even though I did not have money; I borrowed from somebody and installed the machine in my compound.” Her determination mirrors thousands of others whose work quietly sustains families and local markets.

Researchers agree that empowering women is one of the most effective paths out of poverty. The brief calls for fast-tracking the Women’s Rights and Inheritance Bill, enforcing joint land titling and ensuring that at least 40% of MSME grants go to women-led firms.

“Many young women during the cashless policy and fuel subsidy lost their capital,” Diwakar explained, “from which they could have invested or diversified their income.”

From Taxation to Support

Despite official rhetoric celebrating entrepreneurship, many small traders face harassment, multiple taxes and bureaucratic hurdles that stifle rather than support them.

“We come to the realization that we must support these groups to deepen their productivity, as opposed to revenue extraction, which is what we see,” said Ukpai. “If you have a little kiosk or a side shed where you run your informal business,” he added, “the community tax authorities are on your neck, the state tax authorities on your neck, even local touts want something. So even when there’s meager income, it’s dissipated through multiple taxation.”

The IDS team recommends “light-touch” registration systems, presumptive tax holidays for new micro-firms and bundled packages combining training, working capital and insurance. Such steps, they argue, would not only legitimize informal enterprises but also make them more resilient to shocks.

A Grassroots Blueprint for Change

The lesson emerging from Nigeria’s experience is clear: development can grow from below, but only if the state stops standing in its way. Supporting informal entrepreneurs, especially women, means acknowledging them as central to national growth, not as side characters in need of rescue.

As Ukpai put it, “For the government to take notice, it must recognize that people at community level already have strategies to escape poverty. Policy must meet them where they are—in the farms, the workshops and the markets.”

For Diwakar, poverty reduction in Nigeria “isn’t just about handouts; it’s about recognizing the systems of resilience that already exist and building policies that reinforce them,” she told The Borgen Project in a Zoom interview. With donor fatigue growing and global development budgets tightening, Nigeria’s “growth from below” offers a blueprint for sustainable, community-led development.

– Shannon Garrido

Shannon is based in Brighton, UK and focuses on Politics for The Borgen Project.

Photo: Flickr