A World Bank analysis has indicated that Nigeria’s poverty rate has increased in light of recent fiscal and economic changes.
The major changes are the foreign currency market rate restructuring and the elimination of the petrol subsidy.
While characterising the current difficulties as transitory, the bank did applaud the Federal Government for what it saw as “bold reforms” needed to save Nigeria from a fiscal cliff.
However, it also stated that the policies have increased the pressure on the expense of living, pushing more Nigerians into poverty—104 million of them currently live below the poverty line.
The Nigerian Bureau of Statistics (NBS) reported that the number of impoverished individuals in the country was 82.9 million in 2019 and 85.2 million in 2020, however, the World Bank study said that the figure had increased from 95 million in 2021 to 100 million in 2022.
The World Bank emphasises the necessity of maintaining the reform momentum in order to finish the reforms and meet their costs in its Nigeria Development Update (NDP), “Turning the Corner: Time to Move From Reforms to Results.”
“Inflation remains at record high levels for Nigeria, 27.3 per cent Year-on-Year, YoY, in October 2023, partly driven by the one-off price impacts of the removal of the gasoline subsidy.
“The impact of this is especially hard on poor and vulnerable citizens. The FX market has remained volatile and in a period of continuing adjustment to the new policy approach, with significant fluctuations in the exchange rate in both the official and the parallel markets. Revenue gains from the FX reform are visible.
“However, there is a need for more clarity on oil revenues, especially the financial gains of Nigeria National Petroleum Corporation Limited, NNPCL, from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on Federation revenues,” it said.
cc: Vanguard Ng
