The World Bank has warned that the economic impact of the Coronavirus pandemic has sent personal income in Africa’s largest economy, Nigeria, back 40 years.
Nigeria recorded 1,184 deaths from Covid-19, and the four-week blockade had a devastating impact on the informal economy. Inflation has skyrocketed in the last 12 months, as more than half of the country’s population is unemployed or underemployed, but foreign investment has plummeted and the economy is projected to shrink by about 4% this year.
The World Bank warned that if Africa’s largest oil producer were to avoid a prolonged recession, it would have to enact a series of potentially politically unpopular reforms.
“This is not just a crisis for Nigeria .. .. Shubham Chaudhuri, head of the World Bank’s mission in Nigeria, told the Financial Times.” Yes .. .. It’s an opportunity not to return to business as usual, but [the economy] The unraveling is the real thing. “
Chaudhuri praises the government’s efforts stimulated by the pandemic-related economic crisis, abolishes the government’s multi-billion dollar annual fuel subsidies, raises electricity prices and shifts to market-led exchange rates Did.
“For the first time in the last nine months over the years, the government has made fairly politically courageous decisions, but the important thing is to maintain those momentum,” he said.
But without a strong policy response, the World Bank shared a summary that “Nigeria is at risk of repeating the shock experience of the 1980s, which slowed the development of Nigeria by decades.”
“Unlike the 2015-16 recession that followed the fall in oil prices, Nigeria cannot afford to just be “confused” because of the wider global economic crisis,” Chaudhuri said.
Chaudhuri’s comments came when the bank released Nigeria’s annual development report. The report proposed reforms such as closer to market-driven exchange rates, reopening borders, deregulation of business foreign exchange, tax reform, electricity sector revisions and expansions. Direct cash transfers to vulnerable and poor people.
“It’s not a completely end-of-life scenario … because we have the option to implement such reforms,” Cauduri said.
The World Bank estimates that about 10% of the population, or 15 to 20 million Nigerians, will be driven into poverty by 2022, living on less than $ 1.90 a day, primarily due to pandemics.
Nigeria will lose 14 years of per capita income over the next few years due to Covid-19 and will return to 2010 levels. This is equivalent to the 1980 real equivalent. The average income loss in other middle-income countries is 7 years.
Banks predict that as a result of falling oil prices, government revenues will decline by at least 2 percent of gross domestic product in 2020 alone. Remittances, which accounted for about 5% of GDP last year, are expected to decline by as much as 20% this year.
Domestically, Nigeria is experiencing anxiety and tension resulting from growing dissatisfaction among the rapidly growing population of unemployed youth, as evidenced by anxiety after the crackdown on peaceful anti-police atrocities in Lagos in October. Faced with rising, FT reported.