THE number of poor people in Nigeria would increase by 20 million in the next two years, according to the latest edition of the World Bank’s Nigeria Development Update.
The Nigeria Development Update (NDU) is a World Bank report series produced twice a year, which assesses recent economic and social developments and prospects in Nigeria. The report also provides an in-depth examination of selected economic and policy issues and an analysis of Nigeria’s medium-term development challenges.
The latest update, titled ‘Rising to the challenge: Nigeria’s COVID response’, was released on Thursday, December 10. It focused mostly on the impact of the COVID-19 pandemic on Nigeria, and efforts by the Federal Government and state governments to address the situation.
Nigeria was designated as the ‘poverty capital of the world’ following a projection by the World Poverty Clock, compiled by Brookings Institute, that the country has the largest number of people living in extreme poverty, with an estimated 87 million Nigerians, or around half of the population, believed to be living on less than $1.90 a day.
However, the World Bank, in its latest Nigeria Development Update, predicted a further increase in the level of extreme poverty in Nigeria.
“The extreme poverty rate is expected to rise, with the number of poor likely to increase by 15 to 20 million by 2022. The human and economic costs would be amplified if the global economic recovery is less robust or takes longer than hoped and if Nigeria fails to take the needed policy and fiscal measures to free up the space of a rapid private sector-led recovery,” the World Bank report said.
The World Bank stressed that Nigeria is currently at a critical historical juncture due to uncertainties surrounding the COVID-19 pandemic.
The report observed that the Federal Government’s plan to lift 100 million Nigerians out of poverty by 2030 was a big challenge in normal circumstances and has become more difficult because of the pandemic.
The report stated, “While there is a lot of uncertainty about when the pandemic will end, it is clear that Nigeria faces an unprecedented crisis that requires an equally unprecedented policy response.
“Realising the government’s ambition of lifting 100 million Nigerians out of poverty by 2030 would be challenging even under normal circumstances. The onset of the COVID-19 crisis has made the task much more challenging and urgent because of the severity of the economic downturn and the decline in fiscal resources.”
Projecting a gloomy outlook for Nigeria’s economy in the short and medium-term, the World Bank noted that, in its baseline scenario, by 2023, Nigeria’s GDP per capita is expected to be roughly similar to that of 2010.
“This means that Nigeria would lose 14 years in per capita incomes. By contrast, if we compare Nigeria with an average of middle-income economies worldwide, we find that other countries are expected to lose around seven years.
“In other words, while COVID-19 will hit incomes across all countries, Nigeria is expected to suffer twice as much. But that is not all. In fact, because Nigeria’s growth has been uneven and volatile, once we adjust for inflation, we find that for Nigeria going back to 2010 is equivalent to going back to the 1980s,” the report added.
The Nigeria Development Update assessed employment conditions, social protection, public health and education in Nigeria under COVID-19.
According to the report, findings from a sample of household heads interviewed in successive rounds of the Nigeria COVID-19 National Longitudinal Phone Survey (NLPS) since March 2020 indicate that employment contracted sharply and job turnover increased significantly in April, but both appear to have stabilised by the end of August.
“Even though many Nigerians returned to work after the easing of strict lockdown measures in the early phase of the COVID-19 crisis, most households remain in an economically precarious situation,” the report said, noting that more than two in three households report lower incomes now than one year ago.
Nigerian households are facing increased economic precarity – unemployed workers have migrated back to the low productivity agricultural sector, and reports of food insecurity have increased substantially from the previous year, the World Bank observed, adding that women were more affected.
The effectiveness of intervention and empowerment schemes launched by the government under the National Social Investment Programs were undermined by critical financing gaps and institutional challenges, the report said.
“Most safety nets are limited in scope, and social-protection programs cover only a small fraction of their target populations,” the World Bank report said.
Available indicators, such as the total number of deaths, case fatality rate, and the total number of confirmed cases, show that Nigeria has fared reasonably well in responding to the COVID-19 pandemic but the report observed that “COVID-19 has had a substantial negative impact on service delivery for both disease control programs and essential health care services” in the country.
The COVID-19 pandemic had already plunged Nigeria’s economy into recession – the country’s second recession in less than five years during the administration of President Muhammadu Buhari.
The latest recession, which was forewarned by the World Bank after the COVID-19 pandemic led to a sharp fall in the price of crude oil, Nigeria’s major source of revenue, was confirmed by figures published by the National Bureau of Statistics, in its Gross Domestic Product report, on November 21.