The World Bank has projected that the prevailing economic crisis is likely to push an additional one million Nigerians into poverty by the end of 2022, on top of the six million Nigerians that were already predicted to fall into poverty this year because of the rise in prices, particularly food prices.
This is contained in the latest edition of the World Bank Nigeria Development Update (NDU), which highlights that “Nigeria is in a paradoxical situation: growth prospects have improved compared to six months ago but inflationary and fiscal pressures have increased considerably, leaving the economy much more vulnerable.”
In the report, titled: “The Continuing Urgency of Business Unusual,” the Bank says that “inflation in Nigeria, already one of the highest in the world before the war in Ukraine, is likely to increase further as a result of the rise in global fuel and food prices caused by the war.”
It added: “and that, the World Bank estimates, is likely to push an additional one million Nigerians into poverty by the end of 2022, on top of the 6 million Nigerians that were already predicted to fall into poverty this year because of the rise in prices, particularly food prices.”
This latest edition of the NDU highlights that the inflationary pressures will be compounded by the fiscal pressures Nigeria will face this year because of the ballooning cost of gasoline subsidies at a time when oil production continues to decline.
Hence, Nigeria, for the first time since its return to democracy, and alone among major oil exporters, is unlikely to benefit fiscally from the windfall opportunity created by higher global oil prices.
World Bank Country Director for Nigeria, Shubham Chaudhuri said: “When we launched our previous Nigeria Development Update in November 2021, we estimated that Nigeria could stand to lose more than 3 trillion Naira in revenues in 2022 because the proceeds from crude oil sales, instead of going to the federation account, would be used to cover the rising cost of gasoline subsidies that mostly benefit the rich.
