Nigeria Government Reforms: Increased Pressure on the Poor, World Bank Says
Since President Bola Ahmed Tinubu took office in May 2023, Nigeria has seen the adoption of reforms aimed at revitalizing the economy of Africa’s most populous nation. These measures include the liberalization of the weakened naira currency and the reduction of fuel subsidies, allowing the state to maintain low gasoline prices for decades.
However, the World Bank issued a report highlighting that this new political direction, while essential, has put additional pressure on already strained households and businesses. The country’s economic crisis is one of the worst in recent history, with inflation peaking at more than 30% and gasoline prices increasing more than five times since Tinubu assumed the presidency.
Poverty has soared to affect more than half the population in the past six years, according to the World Bank. Indeed, since 2018, the share of Nigerians living below the national poverty line is estimated to have increased sharply, from 40.1% to 56.0%, or 129 million people now living in poverty.
The World Bank cites several issues that have contributed to this increase, including “the recession due to Covid-19, natural disasters such as floods, growing insecurity, the high cost of the demonetization policy in the first quarter of 2023, high inflation and weak economic growth.”
In cities, the poverty rate has almost doubled, from 18 to 31.3%, according to the biannual report assessing the country’s economic and social developments. “Headline inflation is expected to peak at an average annual rate of 31.7% in 2024, mainly due to the depreciation of the naira and rising gasoline prices,” the World Bank said.
Inflation is forecast to decline from 32.7% in September to 14.3% by 2027, helped by the government’s macroeconomic reforms. With two-thirds of Nigeria’s population under the age of 25, the government needs to create jobs to meet this demand, the organization added.
In conclusion, while government reforms in Nigeria are essential to revitalizing the country’s economy, it is crucial to consider the impact on the population already living in poverty. The authorities will need to put in place effective social policies to ensure that economic progress benefits all Nigerians, especially the poorest.