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.
