…says inflation’ll remain high at 24.8%
Despite the abundant human and natural resources in the country, the World Bank has placed Nigeria in the same position with war-torn Democratic Republic of Congo in its latest poverty index, according to a report released yesterday.
The global lender, which reaffirmed that Nigeria’s economic growth would remain at 3.3 per cent in 2024, however, said the country’s inflation rate would remain high at 24.8 per cent year-on-year, YoY, in 2024.
DRC, as at 2021 had a population of 95.894 million with an estimated nominal Gross Domestic Product (GDP) of $69.474 billion as at 2023, while Nigeria, with a population of 223.804 million as at 2023, has a nominal GDP of $394.94 billion.
According to the bank’s Africa’s Pulse Report, “the speed of poverty reduction has decreased tremendously since 2014. The rate of reduction was 3.1 per cent between 2010 and 2014, subsequently decreasing to 1.2 per cent between 2014 and 2019.
“In contrast, the rest of the world reduced extreme poverty on average by 9.2 percent per year within the same time horizon, suggesting that the Africa region is falling further behind.
“In addition, there is substantial regional heterogeneity in where the poor are with Nigeria and the Democratic Republic of Congo accounting for one in three of those living in extreme poverty.”
Recall that the World Bank in its development update on Nigeria released in 2023 had put Nigeria’s poverty rate at 46 per cent, indicating that about 104 million Nigerians were on the poverty baseline.
The Bretton Woods institution, in the new report, also said that projection for 2025 to 2026 was, however, reduced by 0.1 percentage points to 3.6 per cent from its January projection of 3.7 per cent.
According to the bank, “growth in Nigeria is projected at 3.3 per cent in 2024 and 3.6 per cent in 2025–26 as macroeconomic and fiscal reforms gradually start to yield results.
“A more stable macroeconomic environment, as the reforms’ initial shock dissipates, will lead to sustained but still slow growth of the non-oil economy.
“The oil sector is expected to stabilise with recovery in production and slightly lower prices. “Structural reforms will be needed to foster higher growth.
“Average inflation will remain elevated at 24.8 per cent in 2024, although it is expected to ease gradually to 15.1 per cent by 2026 on the back of monetary policy tightening and exchange rate stabilisation.”
It further hinted that food inflation and the weakening of domestic currencies were still major drivers of inflation across countries in the sub Saharan Africa region.
It recalled that “by February 2024, about one third of the sub-Saharan African countries with monthly available food price information (14 of 40 countries) had double-digit year-on-year rates of food inflation, with the fastest increases experienced in Ethiopia, Malawi, Nigeria, Sierra Leone, and Zimbabwe,” adding that the rate of poverty reduction in the region “is slow and that Nigeria and the Democratic Republic of Congo account for one in three of those living in extreme poverty.
“The region also faces the triple challenges of high extreme poverty, high inequality, and low transmission of growth to poverty reduction.”
