The World Bank has painted a gleam picture of Nigeria’s economic growth after the COVID-19 shock which rattled the world and left none untouched.
Although economic growth has since improved for Africa’s most populous country, the pointers are not bright with inflation, insecurity and inadequate reforms affecting its rise.
In a report by the World Bank on Tuesday, it said the lack of growth reforms in Nigeria may have pegged the country’s growth back and makes it lag Sub-Saharan Africa’s current projections.
The World Bank in its bi-annual report projected Nigeria’s economy to grow at 1.9% in 2021 and 2.1% in 2022, in what’s lower than the 3.4% and 4.0% projected this year and the next for sub-Saharan Africa.
While the government employed shocks in 2020 to mitigate the effects of the pandemic, many Nigerians are now in poverty, due to inflation and instability in the prices of food, further worsening the already worrisome food insecurity in the country.
Food inflation has stood for 70% of Nigeria’s inflation in 2021 and 11 million people may be in poverty by 2022, taking the entire population of poor Nigerians to 100million, almost half of its over 200 million population.
The World Bank also posted 16.5% as inflation in Nigeria, a figure far higher than the 5.9% projected for Sub-Saharan Africa excluding Nigeria.
Insecurity has limited the production and transportation of food to markets, and this has affected prices with reforms also expected in the areas of food production.
Electricity has also been identified as a major challenge with subsidies found not to be beneficial to poor households who stand for 22% of the households that have power. According to the World Bank, the rich households are still the main beneficiaries of the subsidized electricity in Nigeria as more than 80% of the rich households have electricity.
Recall that Nigeria’s headline inflation for May moderated by 0.19% to 17.93 from 18.12% in April, while food inflation also slightly moderated from 22.72% in April to 22.28% in May.
