A new World Bank report on Nigeria’s response to Covid-19 has called for the sustenance and deepening of policy reforms, which is critical to mitigating the impact of the pandemic in Nigeria.
The report titled: “Rising to the Challenge: Nigeria’s COVID response” was presented during the latest World Bank Nigeria Development Update (NDU), held on Thursday.
Following double shocks from COVID-19 and low oil prices, the latest World Bank NDU projects that the economy could shrink up to 4 percent in 2020. The pace of recovery in 2021 and beyond remains highly uncertain and subject to the pace of reforms.
In general, the report expressed both optimism and pessimism over Nigeria’s future, stressing that due to the pandemic, the number of poor people in the country by 2022 is likely to hit between 15-20 million. However, on the positive side, the report stated that if the current reforms are sustained and the right mix of policy measures is implemented, the path might be avoided.
In addition, the report highlighted policy options in five areas that would help to curb the impact of the COVID-19 crisis in Nigeria and accelerate recovery;
- Managing the domestic spread of COVID-19 until a vaccine is available for distribution.
- Enhancing macroeconomic management to boost investor’s confidence.
- Safeguarding and mobilizing revenues.
- Reprioritizing public spending to protect critical development expenditure.
- Supporting economic activity and access to basic services and providing relief for poor and vulnerable communities.
What they are saying
- Driving home his point on the right policy mix as a panacea for recovery, the World Bank Country Director for Nigeria, Shubham Chaudhuri said:
- “Nigeria is at a critical historical juncture, with a choice to make. Nigeria can choose to break decisively from business-as-usual, and rise to its considerable potential by sustaining the bold reforms that have been taken thus far and going even further and with an even greater sense of urgency to promote faster and more inclusive economic growth.”
Corroborating earlier assertion by the Director, the World Bank Lead Economist for Nigeria and co-author of the report, Marco Hernandez, remarked that:
- “Nigeria can build on its reform momentum to contain the spread of COVID-19, stimulate the economy, and enable the private sector to be the engine of growth and job creation. It can also redirect public spending from subsidies that benefit the rich towards investments in Nigeria’s people and youth in particular, and lay foundations for a strong recovery to help make progress towards lifting 100 million people out of poverty.’’
What you should know
The report highlighted measures taken by the government since April to include; harmonization of exchange rates, introduction of a market-based pricing mechanism for gasoline, adjusting electricity tariffs to more cost-reflective levels, reduction of non-essential expenditures and redirecting resources towards the COVID-19 response.
- It also highlights greater transparency in the oil and gas sector and public debt as essential steps for a resilient recovery.
Insecurity: FG to implement town hall meetings to reach a national consensus
The meetings are set to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
The Federal Government announced the launch of town hall meetings to address the twin issues of insecurity and its concomitant effect on national unity and cohesion.
This was disclosed by the Minister of Information, Lai Mohammed, at the Town Hall Meeting in Kaduna on Thursday, themed “Setting Benchmarks for Enhanced Security and National Unity in Nigeria.”
What the Minister is saying
“The correct starting point towards addressing these myriads of problems is the building of an “elite consensus” on the security, unity, indissolubility, and peaceful existence of Nigeria.
“Such elite consensus had worked in the past. Can we make it work now and proffer solutions in order to stave off the threats to our unity as a nation?” he said.
The Minister disclosed that the meetings are necessary to bring all critical stakeholders together to deliberate on the issues and possibly reach a consensus on the way forward.
“We expect this Town Hall meeting to develop concrete, implementable resolutions because a lot of talks and postulations had taken place with little or no requisite outcome.”
In case you missed it
- Former Vice President, Atiku Abubakar warned that the rising insecurity in Nigeria is a result of rising youth unemployment. He urged Nigeria to tackle out-of-school children cases, pay a monthly stipend to poorer families, incorporate youths who are above school age into massive public works programmes and others.
- Senator Ali Ndume insisted that the Federal Government needs to increase its total military spending to be able to tackle the rising insecurity in Nigeria which has seen a number of school students in 2021 kidnapped by bandits.
IMF lifts 2021 global GDP growth to 6%
The group also warned that economic recoveries are diverging dangerously across and within countries.
The International Monetary Fund has lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020 due to the effects of the COVID-19 pandemic. This disclosure was made on the organisation’s website on Tuesday.
The group also warned that economic recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well.
What the IMF is saying
“The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
This makes the United States the only large economy projected to surpass the level of GDP it was forecast to have in 2022 in the absence of this pandemic.
China is projected to grow this year at 8.4 percent. While China’s economy had already returned to pre-pandemic GDP in 2020, many other countries are not expected to do so until 2023.”
On divergent recoveries
The IMF stated that divergent recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations.
“The average annual loss in per capita GDP over 2020–24, relative to pre-pandemic forecasts, is projected to be 5.7 percent in low-income countries and 4.7 percent in emerging markets, while in advanced economies the losses are expected to be smaller at 2.3 percent,” they said.
“Faster progress with vaccinations can uplift the forecast, while a more prolonged pandemic with virus variants that evade vaccines can lead to a sharp downgrade. Multispeed recoveries could pose financial risks if interest rates in the United States rise further in unexpected ways.“
For Africa, IMF forecasts economic growth of 3.4% in 2021 and 4% by 2022, Nigeria is expected to grow by 2.5% in 2021 and 2.3% by 2022, while South Africa is projected to hit growths of 3.1% and 2.0% for the respective years in focus.
In case you missed it
The International Monetary Fund (IMF) identified some factors that hamper the economic recovery of low-income countries from the devastating impact of the coronavirus pandemic, factors including access to vaccines, limited policy space to respond to the crisis, the lack of means for extra spending, pre-existing vulnerabilities such as high levels of public debt in many low-income countries and sometimes weak, negative, total factor productivity performance in some low-income countries. These factors continue to act as a drag on growth.
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