A World Bank’s Nigeria Development Update (NDU) has shown that an average Nigerian may witness a setback of decades of economic growth as the country could enter its deepest recession since the 1980s.
The bank also projects that the number of poor people in the West African country will increase by 20 million by 2022.
World Bank’s country director for Nigeria, Shubham Chaudhuri, said: “Nigeria is at a critical historical juncture, with a choice to make.”
He added further that “Nigeria can choose to break decisively from business-as-usual and rise to its considerable potential by sustaining the bold reforms that have been taken thus far and going even further and with an even greater sense of urgency to promote faster and more inclusive economic growth.”
The country’s National Bureau of Statistics (NBS) in its figures from the 2019 poverty and inequality in Nigeria report showed that 40 percent of the total population, or almost 83 million Nigerians, live below the poverty line of N137,430 per year.
The World Bank in its latest update warned that the economy may shrink up to 4 percent in 2020 due to the COVID-19 pandemic and weak oil prices.
The bank noted that food insecurity has escalated while “economic precarity is on the rise because unemployed workers have migrated to the low-productivity agricultural sector.”
“Nigeria can build on its reform momentum to contain the spread of COVID-19, stimulate the economy, and enable the private sector to be the engine of growth and job creation.
“It can also redirect public spending from subsidies that benefit the rich towards investments in Nigeria’s people and youth in particular, and lay foundations for a strong recovery to help make progress towards lifting 100 million people out of poverty,” said Marco Hernandez, World Bank’s lead economist for Nigeria.
In its recommendation, the bank urged the Nigerian government to carry on in managing the domestic spread of COVID-19 until a vaccine is available for distribution, enhancing macroeconomic management to boost investor confidence, as well as safeguarding and mobilizing revenues.
In addition, the bank advised that the country’s national revenue be earmarked for critical development expenditures, encouraging economic activity, providing relief items, and access to basic services in rural communities.