Adedapo Adesanya
By Adedapo Adesanya
The World Bank has revealed that high inflation, driven by soaring food prices, has pushed seven million Nigerians into poverty.
In a new report signed by Mr Shubham Chaudhuri, the World Bank Country Director for Nigeria, the Bretton Wood institution commended Nigeria for shielding its economy from the fallout from the coronavirus pandemic but called for urgent measures to break inflation and protect livelihoods.
Nigeria, Africa’s largest crude exporter and the most populous economy, slipped into a recession in late 2020, hurt by lower oil prices and the pandemic, but unexpectedly emerged from the slump in February.
In the recent statistics, Business Post reported that last month, year-on-year inflation dipped to 17.93 per cent, just below the four-year high of 18.17 per cent registered in April, according to the National Bureau of Statistics (NBS).
There was a decline in food inflation which stood at 22.28 per cent compared to 22.72 per cent year-on-year in April 2021.
“Food prices accounted for over 60 per cent of the total increase in inflation. Rising prices have pushed an estimated 7 million Nigerians below the poverty line in 2020 alone,” its report published on Tuesday said.
The World Poverty Clock, which uses the United Nations (UN), the International Monetary Fund (IMF) and World Bank data to monitor progress against poverty, reports Nigeria had 41 per cent of its population or nearly 87 million people living in extreme poverty on less than $1.90 per day.
The World Bank report, however, applauded government reforms to offset the crisis and help recovery, including cost-cutting and adjustments to energy subsidies but warned that those measures needed to be sustained.
“Nigeria faces interlinked challenges in relation to inflation, limited job opportunities, and insecurity.
“While the government has made efforts to reduce the effect of these by advancing long-delayed policy reforms, it is clear that these reforms will have to be sustained and deepened.
“Nigeria needs urgently to reduce inflation by promoting inclusive growth and job creation and helping small and medium businesses gain access to finance,” it said.
The World Bank pointed out that the COVID-19 pandemic and the oil price crash have hammered Nigeria’s economy, which gets 90 per cent of foreign exchange earnings from petroleum exports, pushing it into its second recession in four years.
As well as inflation, a rise in joblessness has left a third of Nigeria’s workforce unemployed at the end of 2020, according to the statistics office.
