The World Bank has said that the removal of import restrictions in Nigeria will lift about 1.3 million people out of poverty.
It stated this in the December 2023 edition of its Nigeria Development Update (NDU) report.
This comes as some members of the House of Representatives recommended a ban on the import of items that can be locally produced in the country.
Also, the CBN lifted the foreign exchange proper centohibition on 43 items, including rice, fertilizer, and cement.
The World Bank has commended the move by the apex bank, describing it as pro-poor as it enhances consumer welfare.
The report read:
- “Import restrictions disproportionately affect goods that are consumed more by the poorer households. For example, rice—a staple food for about 84 per cent of Nigerian households and consumed in both locally produced and imported varieties—has seen escalating prices, a trend exacerbated by import restrictions.
- “Recent World Bank estimates show that removing import restrictions could lower the prices of affected items by 4.7 per cent. This would lead to an overall increase in purchasing power which, in turn, would lift about 1.3 million people (around 0.6 percent of the population) out of poverty.”
Kaduna, Ekiti, Enugu, six other biggest beneficiaries
The Bretton Woods institution further said that certain states will benefit more from the positive impacts on poverty reduction triggered by the removal of the import ban.
The biggest beneficiaries are Kaduna, Ekiti, Enugu, FCT, Kwara, Anambra, Adamawa, Cross River, and Kebbi, while the smallest are Rivers, Akwa Ibom, Ondo, Abia, Imo, and Ebonyi.
The World Bank, however, noted that although “the removal of import restrictions may present challenges to certain sectors, these can be mitigated for some of them with a comparative advantage.”
It urged the government to reduce the overall cost of doing business and ensure several complementary reforms to support “Nigeria’s structural agenda and overall gains in competitiveness and economic diversification.”
Tinubu’s reforms are expected to undo the poverty increase from 2024 as 24 million Nigerians became poor in five years
The big global lender also noted further that the reforms by the current administration will likely undo the increase in poverty recorded in the past five years.
The World Bank said that about 24 million Nigerians became poor between 2018 and 2023, with the total number of poor people rising from 79 million to 104 million.
The report read:
- “The recent reforms are expected to undo the increases in poverty seen in recent years from 2024 onward, albeit only marginally and slowly.
- Sluggish growth and rising inflation have increased poverty from 40 per cent in 2018 to 46 per cent in 2023, pushing an additional 24 million people below the national poverty line.
- “The number of poor rose from 79 million in 2018 to 104 million in 2023, with urban poor—more exposed to inflation—increasing from 13 to 20 million, while the number of poor people in rural areas increased from 67 to 84 million.
- “In the medium term, the reforms will reverse this trend through higher growth and lower inflation, but to a limited extent, with poverty rates decreasing from 46 per cent in 2024 to 44 per cent in 2026.”