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Seven million Nigerians will be poorer by 2022 – World Bank

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THE World Bank has said that seven million more Nigerians would be poorer due to the “inflation shock” that has begun to affect the world.

The Washington-based bank, in its Nigeria Development Update report titled, ‘The Continuing Urgency of Business Unusual’, explained that the inflation shock was an effect of the raging Russia-Ukraine war.


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An additional one million people, the report stated, would compound the statistics to present a gloomier outlook by the end of 2022.

The lender noted that the prices of yam, bread, one kilogramme of rice and wheat flour had increased faster than average inflation as households were now feeling the pinch in finances more than ever.

Pointing out that N30,000 was Nigeria’s minimum monthly wage in nominal naira in 2019, it stated that the real minimum wage in naira in 2022 had dropped to N22,000, after discounting for inflation.

The Bank warned that Nigerian states would likely lose N18.8 billion in oil and gas revenues in 2022, as worsening revenue collection at the federation level increases budgetary pressures for the states.

“Stagnating net oil revenues will significantly affect the fiscal situation at the state level. State governments are projected to collectively receive 2.7 per cent fewer revenues than in 2021, as federal transfers are estimated to decline by 10 per cent against 2020 levels.

“Lower transfers will cause state governments to incur debt or drastically slash discretionary expenditure. Although states receive the majority of VAT revenues, VAT increases would not make up for the loss of net oil revenues.

“As a result, in 2022, the average state in Nigeria will lose N18.8bn in oil and gas revenues, while optimistic projections place average gains from VAT and the electronic money transfer levy at N7.1bn per state, and average increases in each state’s independent revenues at N6.7bn. As a result, the average state can expect to lose N5bn in revenue in 2022,” the report stated.

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The global financial institution had once advised the Central Bank of Nigeria (CBN) to adjust the exchange rate reflective of market dynamics, while urging it to take advantage of the surging oil price to unify its exchange rates.

 

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Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org

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