The Chairman of the Alliance for Economic Research and Ethics, Dele Oye, has called on the Central Bank of Nigeria (CBN) and other regulators to impose interest rate caps on digital loans, warning that many Nigerians are being trapped in a cycle of debt by lenders charging annual interest rates exceeding 300 per cent.
In a statement titled “The Mathematics of Marginalization: Decoding Nigeria’s Poverty Premium,” Oye said Nigeria’s economic system disproportionately penalises poor and vulnerable citizens by making essential goods, services and credit more expensive for those with the least financial resources.
He described poverty as an “extractive economic mechanism” that forces low-income households to pay higher costs for food, healthcare, housing and borrowing.
According to Oye, recent World Bank data showed that 41.82 per cent of Nigerians live below the international poverty line of $3.00 per day, while 47.03 per cent experience multidimensional poverty.
He argued that with millions of Nigerians facing financial hardship, the country’s economic structure was worsening inequality rather than reducing it.
Oye noted that many financially excluded Nigerians who cannot access affordable bank loans are increasingly relying on digital lending platforms, where high interest rates and hidden charges often deepen their financial difficulties.
He cited documented cases of borrowers receiving ₦65,000 loans but being required to repay ₦93,000 within seven days. In some instances, missed repayment deadlines attracted penalties that pushed outstanding debt to as much as ₦158,000.
According to him, such lending practices have created a poverty trap in which people with the lowest incomes bear the highest borrowing costs.
He also highlighted the impact of poverty on household spending, noting that low-income families often purchase food in small quantities because they cannot afford bulk purchases, resulting in higher prices over time.
On healthcare, Oye said many Nigerians delay seeking treatment because they cannot afford preventive care, allowing minor illnesses to develop into more serious and costly medical conditions.
He explained that a routine malaria test costing about ₦5,000 could eventually result in hospital expenses of ₦50,000 if treatment is delayed, placing additional financial pressure on struggling households.
Oye further raised concerns about Nigeria’s housing sector, saying many renters spend between 40 and 50 per cent of their income on accommodation while also facing demands for one or two years’ rent in advance.
To address the challenges, he recommended stricter regulation of digital lenders, stronger consumer protection measures, affordable housing programmes, expanded access to banking services, targeted social protection initiatives and greater support for workers in the informal sector.
He warned that unless structural reforms are implemented, millions of Nigerians would continue to face an economy where poverty itself increases the cost of survival.
In a separate report titled “The Unquestioned Pain: How Nigeria’s Lived Realities Are Becoming a Culture of Trauma and Why We Refuse to Accept It,” Oye linked widespread poverty to worsening social outcomes, particularly among children.
He said more than 115 out of every 1,000 Nigerian children die before reaching the age of five, attributing the high mortality rate to poor nutrition, inadequate healthcare and difficult living conditions associated with poverty.
Oye added that the effects of poverty extend beyond the present generation, warning that children raised in deprived environments face higher risks of malnutrition, poor educational outcomes and limited economic opportunities.
He noted that about 133 million Nigerians are living in multidimensional poverty, arguing that the situation reflects structural failures rather than a lack of individual effort.
According to Oye, Nigeria possesses abundant natural and human resources but continues to struggle with widespread poverty because of systemic weaknesses that prevent inclusive economic growth.
He urged policymakers to move beyond managing hardship and instead implement reforms that tackle the root causes of poverty, inequality and financial exclusion.
