20 million Nigerians could become poor by 2022 – World Bank

The number of poor Nigerians could increase by 15 to 20 million by 2022 in the absence of measures to mitigate the impact of the COVID-19 crisis, the World Bank has said.

The multilateral financial institution said on Thursday that in the next three years, an average Nigerian could see a reversal of decades of economic growth and the country could enter its deepest recession since the 1980s. 

The World Bank, in its latest Nigeria Development Update released on Thursday, argued that this path could be avoided if progress in the current reforms is sustained and the right mix of policy measures is implemented.

The report, entitled “Rising to the Challenge: Nigeria’s COVID response”, takes stock on the recently implemented reforms and proposes policy options to mitigate the impact of COVID-19 and foster a resilient, sustainable, and inclusive recovery.

“Nigeria is at a critical historical juncture, with a choice to make,” said World Bank Country Director for Nigeria, Shubham Chaudhuri.

“Nigeria can choose to break decisively from business-as-usual, and rise to its considerable potential by sustaining the bold reforms that have been taken thus far and going even further and with an even greater sense of urgency to promote faster and more inclusive economic growth.”

The World Bank projected that the economy could shrink up to 4 percent in 2020 following the twin shocks of COVID-19 and low oil preformsIt said the pace of recovery in 2021 and beyond remained highly uncertain and subject to the pace of reforms.

According to the report, the pandemic is disproportionately affecting the poor and most vulnerable, women in particular.

It said, “In the absence of measures to mitigate the impact of the crisis, the number of poor could increase by 15 to 20 million by 2022. 

“Food insecurity has increased substantially and economic precarity is on the rise because unemployed workers have migrated to the low-productivity agricultural sector.”

Nigeria has the largest poor population in sub-Saharan Africa, with 79 million extremely poor in 2018, according to the bank’s Poverty and Shared Prosperity Report released in October. 

The NDU acknowledged measures taken by the government since April, including the efforts to harmonise exchange rates, introduce a market-based pricing mechanism for petrol, adjust electricity tariffs to more cost-reflective levels, and reduce non-essential expenditures and redirect resources towards the COVID-19 response. 

It also highlighted the greater transparency in the oil and gas sector and public debt as essential steps for a resilient recovery.

World Bank Lead Economist for Nigeria and co-author of the report, Marco Hernandez, said, “Nigeria can build on its reform momentum to contain the spread of COVID-19, stimulate the economy, and enable the private sector to be the engine of growth and job creation. 

“It can also redirect public spending from subsidies that benefit the rich towards investments in Nigeria’s people and youth in particular, and lay foundations for a strong recovery to help make progress towards lifting 100 million people out of poverty.”