Monday, June 21, 2021 09:10 AM / by World Bank/ Header
Image Credit: World Bank
- The latest Nigeria
Development Update report says that Nigeria has exited from its deepest
recession in four decades as COVID-19 restrictions were eased
- Oil prices recovered,
and the authorities implemented sensible and timely policies to counter
the economic shock on Nigerian's welfare and to create new fiscal space
- With poverty increasing in 2020 due to the
combined effects of COVID-19 and rising prices, the report recommends
policy options that can help reduce inflation and protect poor households
from its impacts
In 2020 the Nigerian economy shrank by
1.8%, its deepest decline since 1983. The COVID-19 crisis drove the economic
slowdown; the external context was marked by capital outflows, intensified risk
aversion, low oil prices, and shrinking foreign remittances.
The Nigeria Development Update Resilience
through Reforms states that reforms implemented by the Nigerian government
were critical and timely to alleviate the impact of the recession on the
economy and to create additional fiscal space. Reform slippages would threaten
the pace of recovery and limit the government's ability to address gaps in
human and physical capital.
The report discusses policy options to reduce
inflation, protect the poor and vulnerable and support economic recovery.
Accomplishing these goals will require a big push in exchange-rate management,
monetary policy, trade policy, fiscal policy, and social protection. Some
specific measures recommendations are the following:
the transparency and predictability of exchange rate management policies to
reduce distortions in allocations in the private and public sector; and to
ensure that agents can access foreign exchange in a timely and orderly manner,
at an agreed rate.
defined monetary-policy priorities and objectives, with price stability as the
primary goal. The resumption of naira-denominated open-market operations (OMOs)
based on a transparent issuance schedule, and signal to markets that OMOs will
use short-maturity securities to achieve price stability.
- Full and
effective reopening of land borders for trade and strengthening regional
cooperation to combat smuggling.
of imports for staple foods and medicines by removing them from the list of
foreign exchange (FX) restrictions and replacing import bans and with tariffs
that align with the ECOWAS Common External Tariff.
mechanisms to monitor and report the federal government's stock of Central Bank
overdrafts to control the growth of the money supply.
elimination of the petrol subsidy; and design of sequenced reforms to mobilize
domestic nonoil revenue in a way that does not affect the economic recovery,
including increasing excise taxes on harmful consumption goods, rationalizing
tax expenditures, removing loopholes in tax laws, and improving tax compliance
by strengthening revenue administration.
the National Social Safety Nets Program (NASSP) to provide transfers to
additional households, and temporarily increase transfers to current
the NASSP with the National Home-Grown School Feeding Program (NHGSFP) to strengthen
the food security of vulnerable households in 26 States: and rapidly implement
the World Bank-supported CARES project to support households, farmers, and
Recent Economic Developments
The Nigerian economy is expected to grow by 1.8% in
2021, though there is high uncertainty about the outlook. The recovery would be
driven by rise in oil exports and in domestic demand. However, Nigeria's
recovery is expected to underperform those of other oil producers, and an
unexpected shock to oil prices could threaten the modest growth projected.
Moreover, high inflation and high unemployment exacerbate macroeconomic risks,
and activity in the tertiary sector will not fully normalize unless COVID-19 is
contained. By the end of 2021, Nigeria's GDP is likely to approach its 2010
level, thus reversing a full decade of economic growth. GDP per capita is
projected to continue declining because the economy is forecast to grow more
slowly than the population.
Kindly share and stay connected with us on our platforms HERE
You can also subscribe to our NEWSLETTER
Full PDF Report Here
- IMF Staff
Concludes Virtual Visit with Nigeria
- World Bank:
7m Nigerians Pushed Below Poverty Line in 2020
- New World
Bank Report: Critical Reforms Needed to Reduce Inflation and Accelerate
of Japan Gives UNICEF $39m for Vaccine Cold Chains in Nigeria, Others
- World Bank
Expects Global Economy to Grow by 5.6% in 2021
- GDP is No
Longer an Accurate Measure of Growth. So What Can Take Its Place?
- World Bank
Approves $700m Loan to Improve Water Supply, Sanitation and Hygiene
Services in Nigeria
- Fall in
Nigeria's Remittances Drag SSA Total Remittances in 2020
Predictions, Remittance Flows Remain Strong During COVID-19 Crisis
of April 2021 Sub-Saharan Africa Press Briefing
Africa 2021 Regional Economic Outlook: Navigating a Long Pandemic
- IMF to
Provide Support for Nigeria and Other Low-Income Countries
Launches Climate Change Indicators Dashboard
- Fostering a
- IMF Revised
Growth Projection: A Tale of Vaccinated Optimism
- WEO: IMF
Revises 2021 Global Economic Growth to 6% from 5.5%
Executive Board Extends Debt Service Relief for 28 Eligible Low-Income
Executive Board Approves Temporary Extensions and Modification of Access
- AfDB Group
Launches Second Phase of WACMI Project Backed by $850,000 Grant