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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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Nigerian oil regulator implements regional fuel standards

Published

20 hours ago

April 26, 2024

Ifeoluwa Dada

Nigeria’s oil authority has clarified that the recent changes to diesel fuel sulphur content standards are part of a regional effort to make things more uniform and are not meant to loosen rules for local refineries.

A report from S&P Global last week said that the West African fuel market had changed a lot after Nigeria raised the maximum diesel sulphur content from 200 parts per million (ppm) to around 650 ppm. This caused worries that the country might be lowering its standards to allow diesel made in Nigeria that is higher than the 200 ppm limit.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on the other hand, said it was only following a 2020 decision by the Economic Community of West African States (ECOWAS) that all of the regions had to slowly switch to better fuels.

Fuels that have a lot of sulfur can hurt engines and make the air dirty. As of right now, the ECOWAS rule lets locally-made fuel have more sulfur until January 2025. After that, a standard of less than 5 parts per million will be used for all oil, whether it is refined in West Africa or brought in from another country.

Farouk Ahmed, the head of the NMDPRA, told Reuters that the new limits are in line with ECOWAS’s choice to require stricter fuel specifications. The new rules will go into effect in January 2021 for non-ECOWAS imports and January 2025 for ECOWAS refineries.

“We are merely implementing the ECOWAS decision adopted in 2020,” Ahmed said.

“So a local refinery with a 650 ppm sulphur in its product is permissible and safe under the ECOWAS rule until January next year where a uniform standard would apply to both the locally refined and imported products outside West Africa”, Ahmed said.

Ahmed said that importers were told that the amount of sulphur allowed was going down, from 300 parts per million in February to 200 parts per million this month. This was done long before the huge Dangote refinery started providing diesel.

Diesel with a sulphur level of between 1,500 ppm and 3,000 ppm could be brought in by importers before.

The switch to cleaner fuels is in line with efforts to protect the environment around the world and makes sure that all area refiners have the same chances.

Nigeria recently had its worst blackout in decades because of a problem with its energy supply. The high cost of alternative energy sources has been a huge problem for both businesses and individuals, with the price of diesel being the most affordable choice for businesses.

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IMF predicts Kenya’s economy to overtake Angola

Published

20 hours ago

April 26, 2024

Ifeoluwa Dada

The International Monetary Fund (IMF) says that this year, Kenya will pass Angola to become the fourth biggest economy in sub-Saharan Africa. South Africa, Nigeria, and Ethiopia will then follow it.

Kenya is expected to stay in that spot until the end of 2029 as its GDP grew from $113.7 billion (Ksh13.37 trillion) in 2022 to $108.9 billion (Ksh15.14 trillion) last year, based on the current exchange rate. Ethiopia’s lead over Kenya has grown, and in two years it will pass Nigeria to become the second-largest economy in the area.

In 2020, Ethiopia’s economy was smaller than Kenya’s but it has continued upward and is expected to have reached $159.74 billion (Sh21.165 trillion) by 2023, making the gap between the two countries even bigger. Also, Ethiopia’s economy is likely to stay in second place for three years, until 2029.

Some people think that Ethiopia’s gross domestic product (GDP), which is the value of all the goods and services made in the country, is higher than it is. The country just got out of a civil war that lasted two years and destroyed its economy. It is one of the African countries that has not paid one of its debts.

According to the African Development Bank, East Africa will continue to grow fastest in Africa. In 2024 and 2025, growth is expected to reach 5.1% and 5.7%, respectively. The expected strong economic performance of countries in the region is reflected in the growth acceleration of 1.6% points from 3.5% in 2023 to 7% in 2024. Seven economies are expected to grow by 5% or more in 2024: Rwanda (7.2%), Ethiopia (6.7%), Djibouti (6.2%), Tanzania (6.1%), Uganda (6%), Burundi (5.8%), and Kenya (5.4%).

Charlie Robertson, who is in charge of macro strategy at investment management firm FIM Partners UK Ltd., called the exchange rate between the pound and the erg a “fantasy exchange rate.”

“Ethiopia is maintaining a hugely overvalued exchange rate which is not supported by reality,” said Robertson in an email response.

The stated exchange rate for the Ethiopian Birr is 57, but the FIM Partners FX model says that it should be about 97% of the dollar. The IMF says that Ethiopia’s economy grew by 7.2% last year, from a base of $118.97 billion to $193.0 billion. This was the fastest GDP growth in sub-Saharan Africa.

Kenya’s economy, on the other hand, grew more slowly, by only 5.5% in 2023. This was because the country’s economy came out of a year marked by drought and tight global financial markets because of the war in Ukraine. This month, Kenya is likely to share its official GDP numbers for 2023.

“But at a realistic exchange rate, [Ethiopia’s] GDP was probably $90 billion. Kenya’s GDP by comparison was $109 billion in 2023. So, if you use the official figure, you’d say Ethiopia’s economy was about 50% bigger than Kenya – but in reality, Kenya’s economy is bigger.”