Inflation pushed 7m Nigerians into poverty in 2020 – W’Bank
WORLD Bank says inflation pushed not less than seven million Nigerians into poverty in 2020.
A World Bank’s Nigeria Development Update (NDU) Resilience through Reforms released yesterday said the inflation situation was not helped by the pandemic.
“The impact of higher inflation is severe: In 2020, rising prices alone—even without incorporating the direct impacts of COVID-19 on welfare— may have pushed an estimated 7 million Nigerians into poverty.
Driven by a steep increase in food prices, since September 2019 headline inflation has risen dramatically. Although inflation declined slightly in April 2021, it is still the highest in four years. In contrast to previous inflationary episodes in Nigeria, the current trend arises from multiple demand and supply shocks, compounded by policy distortions and the exigencies of the pandemic. Marginally employed workers become prime recruiting targets for criminal organisations and insurgent groups like Boko Haram. Intensifying violence and widespread criminality further erode the labor market, contributing to a vicious cycle of underemployment and instability. Creating adequate productive employment is thus a priority not only for economic policy but also for national security,” it said.
Speaking at the launch of the report in Abuja, Country Director for Nigeria, Shubham Chaudhuri, said Nigeria faces challenges in relation to inflation and limited job opportunities, while noting that GDP per capita is expected to continue to decline.
“Nigeria faces interlinked challenges in relation to inflation, limited job opportunities, and insecurity. GDP per capita is projected to continue declining because the economy is forecast to grow more slowly than the population,” he said.
It will be recalled that President Muhammadu Buhari in his Democracy Day broadcast on June 12, said his government had lifted over 10 million Nigerians out of poverty in the last two years.
Meanwhile, latest report by National Bureau of Statistics (NBS) shows that consumer price index (CPI) which measures inflation increased by 17.93 per cent (year-on-year) in May 2021, indicating 0.19 per cent points lower than the rate recorded in April 2021 (18.12 per cent).
According to the agency, percentage change in the average composite CPI for the 12 months period ending May 2021 over the average of the CPI for the previous twelve months period was 15.50 percent, showing a 0.46 per cent point rise from 15.04 percent recorded in April 2021.
The urban inflation rate increased by 18.51 per cent (year-on-year) in May 2021 from 18.68 percent recorded in April 2021, while the rural inflation rate increased by 17.36 per cent in May 2021 from 17.57 per cent in April 2021.
On a month-on-month basis, the urban index rose by 1.04 percent in May 2021, up by 0.05 percentage points compared to the rate recorded in April 2021 (0.99), while the rural index rose by 0.98 percent in May 2021, up by 0.03 points compared to the rate that was recorded in April 2021 (0.95 per cent).
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