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Nigeria’s extreme poor to hit 95.1m by end of 2022 – World Bank

Published

2 years ago

March 31, 2022

The World Bank has predicted that by the end of 2022, the number of extremely poor people in Nigeria will hit the 95.1 million mark, with an estimated 5 million additional people slipping below the poverty line.

The Washington-based World Bank which made this damning prediction in its poverty assessment report entitled ‘A Better Future for All Nigerians: 2022 Nigeria Poverty Assessment,’ on Wednesday, said despite repeated promises by the President Muhammadu Buhari-led government of lifting millions of Nigerians out of poverty, the indices suggest otherwise.

On several occasions, President Buhari and members of his team have claimed that his government has lifted millions of Nigerians out of poverty, with a projection that by 2023, as many as 100 million Nigerians would have been lifted out of poverty.

But the World Bank report states otherwise as it painted a bleak future for Nigeria’s poor.

Blaming most of the problems that has continued to deepen the country’s economy crisis on unfavourable policies of the government, hich include multiple exchange rates, the country’s trade restrictions, bans on certain goods and the 2019 border closure.

“Such policies have immediate negative effects on poverty reduction through the price channel, as trade restrictions can make the goods that poor households consume, especially food items, more expensive, reducing people’s purchasing power and welfare in turn,” the report said.

“Between 2000 and 2014, Nigeria enjoyed a period of sustained expansion, during which the economy grew by around 7 percent per year, outstripping the estimated annual population growth rate of 2.6 percent.

“But real GDP growth dropped to 2.7 percent in 2015, then 1.6 percent in 2016, as the decline in global oil prices induced Nigeria’s first recession in almost two decades.

“Growth has not recovered subsequently. It lies below population growth and the growth performance of peer countries over the same period. This weakening overall growth performance makes it significantly harder to reduce poverty.”

The bank, however, suggested a way out for the country in the report. It encouraged the strengthening of Nigeria’s social protection system as that will strengthen public trust in governance, develop administrative reach, and boost resilience in the people as that will be crucial for the country’s future.

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Nigeria not earning enough for its developmental needs— IMF

Published

42 mins ago

December 11, 2023

Ifeoluwa Dada

The International Monetary Fund (IMF) has stated that Nigeria is not earning enough revenue to support its developmental needs.

Nigeria’s Minister of Budget and Economic Planning, Abubakar Bagudu, during the 2024 budget presentation before parliament, admitted that “revenue generation remains the major fiscal constraint to Nigeria’s fiscal viability. However, the government is reviewing current tax and fiscal policies to improve revenue generation.

“The target is to increase the ratio of revenue to GDP from less than 10% currently to 18% within the current term of this administration. Efforts will however focus on improving tax administration and collection efficiency.”

The Director of the IMF’s Communications Department, Julie Kozak, revealed over the weekend that the country’s 9% revenue to Gross Domestic Product ratio was very low and not enough to support the country’s social safety nets and development spending, and protect its vulnerable households.

“As we mentioned in our Article IV Consultation, which was held in February 2023, raising revenue from the very current low revenue to GDP ratio of 9% is essential to create fiscal space for social and development spending,” she said in response to a question about Nigeria during the briefing.

“Nine per cent of GDP is a very low revenue to GDP ratio, and it is not high enough to be able to support strong social safety nets, and development spending, to help protect vulnerable households and also to meet Nigeria’s development needs.”

She added, “The 2024 budget aims to reduce the fiscal deficit while also creating space for these priority spendings, both on the social side and also on the development side.”

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Somalia secures $4.5bn debt relief from lenders

Published

18 hours ago

December 10, 2023

Ifeoluwa Dada

After a decade-long process of negotiations and reforms with creditors, Somalia has finally secured a $4.5 billion debt write-off from global lenders as the enhanced Heavily Indebted Poor Countries (HIPC) Initiative has spared the nation from repaying its debt.

The World Bank reports that the country’s debt has significantly decreased from a peak of $5.2 billion to $600 million as a result of the action taken by multilateral and bilateral lenders, including the International Monetary Fund (IMF).

Commercial creditors have contributed $3 billion towards the debt relief, with multilateral creditors contributing $573.1 million, the World Bank’s International Development Association contributing $448.5 million, the IMF contributing $343.2 million, and the African Development Fund contributing $131 million.

Following the Bretton Woods institutions’y boards’ approval process, a historic announcement regarding Somalia’s debt forgiveness is scheduled to take place in Washington DC on December 13.

HIPC completion points were reached by 37 nations, with Somalia following suit after Zimbabwe and Sudan were left behind. Under the leadership of the current president, Hassan Sheikh Mohamud, Somalia began holding HIPC talks ten years ago, and the nation has continued on the reform path despite political obstacles.

Kristina Svensson, the country manager for Somalia at the World Bank, praised Mogadishu for its “remarkable” commitment to reform last week.

“There have been a lot of political challenges within Somalia, but this thing (principles of HIPC), has held it quite high,” she said.

“This is satisfactory for them (Somalia) to achieve debt relief,” said Ms. Svensson. “Both the World Bank and IMF as well as other international partners, have been essential to providing technical assistance to support the achievement of these triggers.”

Over the past few weeks, Somalia has achieved huge milestones in its efforts towards socioeconomic and political liberation. It recently joined regional bloc, East Africa Community (EAC), as it seeks strategic partnerships with neighbours.