Barely three days after President Muhammadu Buhari announced that his administration has lifted 10 million people out of poverty, the World Bank said the rising prices of goods have pushed seven million people into poverty.
The declarations by the president and the World Bank came at a time the National Bureau of Statistics (NBS) said inflations dropped by 0.19 percent in the month of May 2021, while there is an increased outcry among Nigerians on the high cost of basic needs of life like food, drugs and others.
Experts said the verdict of the World Bank was not unexpected considering that even the NBS, which is Nigeria’s most credible statistics collection and analysis outfit had in the past months showed how inflation was pushing the cost of commodities higher.
In a statement in Abuja on Tuesday, the World Bank said: “Food prices accounted for over 60% of the total increase in inflation. Rising prices have pushed an estimated 7 million Nigerians below the poverty line in 2020 alone.”
The statement signed by the bank’s spokesman, Mansir Nasir, cited the latest World Bank Nigeria Development Update (NDU), titled: ‘Resilience through Reforms”.
It said while the government took measures to protect the economy against a much deeper recession, it would be essential to set policy foundations for a strong recovery.
The figure which was based on data for last year indicated that the Nigerian economy experienced a shallower contraction of -1.8 per cent than had been projected at the beginning of the COVID-19 pandemic (-3.2%) in 2020.
“Although the economy started to grow again, prices are increasing rapidly, severely impacting Nigerian households,” it stated.
The global lender advised the Nigerian government not to fail in sustaining and deepening reforms to cushion the economic downturn given the “more favourable external environment, with recovering oil prices and growth in advanced economies.”
According to the World Bank: “A failure to sustain and deepen reforms would threaten both macroeconomic sustainability and policy credibility, thereby limiting the government’s ability to address gaps in human and physical capital which is needed to attract private investment.”
Commenting, the World Bank Country Director for Nigeria, Shubham Chaudhuri, said, “Nigeria faces interlinked challenges in relation to inflation, limited job opportunities, and insecurity.
“While the government has made efforts to reduce the effect of these by advancing long-delayed policy reforms, it is clear that these reforms will have to be sustained and deepened for Nigeria to realise its development potential.”
On his part, the World Bank Lead Economist for Nigeria and co-author of the NDU Report, Marco Hernandez, said: “Given the urgency to reduce inflation amidst the pandemic, a policy consensus and expedite reform implementation on exchange-rate management, monetary policy, trade policy, fiscal policy and social protection would help save lives, protect livelihoods and ensure a faster and sustained recovery.”