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Sunday, June 26, 2022

Inflation Pushed 12.8m Nigerians Into Poverty in 2021- World Bank

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About 12.8 million Nigerians fell into poverty last year as a result of increase in prices of foods, the World Bank has said.

This is even as it warned that many more people in the country may fall into this category this year as prices of foods continue to increase.

According to the January report of the global bank, food inflation in Nigeria, which stood at 17.2 per cent as of November 2021, was the second-highest in Africa, surpassed only by Ethiopia, whose food inflation stood at 38.9 per cent at the same period.

December 2021 food inflation statistics released by the National Bureau of Statistics (NBS) showed that prices of food had further increased as inflation jumped to 17.37 per cent.With the 2021 figure, Nigeria accounted for 12 per cent of the poor in sub-Saharan Africa (SSA) last year, which the global body put at 110 million people.

According to the World Bank’s 2022 Global Economy Prospects report, four countries, the Democratic Republic of Congo, Ethiopia, Nigeria, and South Sudan accounted for over 60 per cent of the poor in SSA last year.

“Last year, nearly 110 million people in SSA were in situations characterized by food crisis or worse—40 million more than at the start of the pandemic, with over 60 percent of these in just four countries: Democratic Republic of Congo, Ethiopia, Nigeria, and South Sudan,” it stated.

While warning that the prices of foods may increase further in these countries this year, the World Bank said: “Supply disruptions, extreme weather events, or armed conflicts could trigger surges in food prices, with vulnerable groups suffering the most.

“A further rise in food prices would squeeze households’ purchasing power and erode consumer confidence, causing more subdued growth and hindering poverty reduction.”

The global bank, however, projected a positive outlook for the nation’s economy this year. “In Nigeria, growth is projected to strengthen somewhat to 2.5 per cent in 2022 and 2.8 per cent in 2023. The oil sector should benefit from higher oil prices, a gradual easing of the Organisation of the Petroleum Exporting Countries (OPEC) production cuts, and domestic regulatory reforms,” it said.

The bank added that activity in service sectors was expected to firm as well, particularly in telecommunications and financial services. “However, the reversal of pandemic-induced income and employment losses is expected to be slow; this, along with high food prices, restrains a faster recovery in domestic demand.

“Activity in the non-oil economy will remain curbed by high levels of violence and social unrest, as well as the threat of fresh COVID-19 flare-ups with remaining mobility restrictions being lifted guardedly because of low vaccination rates—just about 2 per cent of the population, had been fully vaccinated by the end of 2021,” it said.

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