The World Bank has acknowledged the necessity of the reforms implemented by Nigeria’s government, led by President Bola Ahmed Tinubu since May 2023.
These reforms according to it aim to rejuvenate the economy of Africa’s most populous country. However, they have also increased the burden on the population, with more than half living in poverty, said a report released on Thursday.
“The new policy direction is essential, but in the short-term it has added to already intense pressures on households and firms,” the World Bank said in a report published on Thursday.
Nigeria has seen one of its worst economic crises in recent history with inflation at a three-decade high — more than 30 percent — and the price of petrol rising more than fivefold since Tinubu took office.
Poverty has soared to hit more than half of the population over the last six years, according to the World Bank.
“Since 2018, the share of Nigerians living below the national poverty line is estimated to have risen sharply from 40.1 percent to 56.0 percent,” it said, adding that 129 million are now living in poverty.
Multiple issues have contributed to the spike, the lender said, citing “the Covid-19 recession, natural disasters such as flooding, growing insecurity, the high cost of the demonetisation policy in Q1 2023, high inflation and low economic growth”.
The share of the urban population living in poverty has nearly doubled, from 18 to 31.3 percent, according to the report, published twice a year assessing economic and social developments and prospects in Nigeria.
“Headline inflation is anticipated to peak at an average annual rate of 31.7 percent in 2024, largely driven by the depreciation of the naira and increased gasoline prices,” it said.
The World Bank said inflation was expected to fall from 32.7 percent in September to 14.3 percent by 2027, helped by the government’s macroeconomic reforms.
With two-thirds of Nigerians being under the age of 25, the government must create jobs, the organisation added.
