By Kayemo News
World Bank has said the number of poor Nigerians rose from 79 million in 2018 to 104 million in 2023, with urban poor more exposed to inflation that increased from 13 to 20 million, while the number of poor people in rural areas increased from 67 to 84 million.
It stated that sluggish growth and rising inflation increased poverty from 40 per cent in 2018 to 46 per cent in 2023, pushing an additional 24 million people below the national poverty line.
The Washington-based bank stated this in its Nigeria Development Update, December 2023 edition titled, ‘Turning The Corner (from reforms and renewed hope, to results).
According to the World Bank, important reform decisions have been taken for Nigeria to avoid a fiscal cliff, noting that these reforms were followed by difficult economic adjustments.
Since the removal of fuel subsidy, retail fuel prices have increased by more than 163 per cent and after shifting to a unified, market-reflective foreign exchange regime, the naira has depreciated against the US dollar by about 41 per cent in the official market and 30 per cent in the parallel market.
The sharp increase in the price of fuel and other imported goods has contributed to inflation, which hit an 18-year record high of 27.3 per cent year-on-year in October.
However, the World Bank insists that the recent reforms will undo the increases in poverty seen in recent years from 2024 onward, albeit only marginally and slowly.
It argued, “In the medium term, the reforms will reverse this trend through higher growth and lower inflation, but to a limited extent, with poverty rates decreasing from 46 per cent in 2024 to 44 per cent in 2026.”
According to the World Bank, the successful implementation of the initiated reforms will be the first step toward improving Nigeria’s growth prospects.
It highlighted that the implementation of fuel subsidy removal and foreign exchange unification rate would push economic growth to 3.5 per cent between 2023–2026, adding 0.5 percentage points to the growth potential in a scenario in which the reforms had not been implemented.
The global bank further stated that in the medium term, the economy will begin to benefit from increasing fiscal space for development spending.
While noting that inflation will begin to fall in 2024, it added, “Together, such reforms would boost investment and productivity across sectors, unlocking the stronger growth that Nigeria’s economy demonstrably capable of, and allowing economic development to regain its fast pace.”
(Punch)
