Why The World Bank Has Predicted A Gloomy Financial Future For More Nigerians By 2022
The World Bank on Thursday projected that the number of poor Nigerians will increase from the current 90 million to about 100 million by 2022 due to the impact of the COVID-19 pandemic on the country’s economy. It stated that by 2022, about 11 million more Nigerians were expected to fall into poverty due to the COVID-19 crisis. The World Bank also put the financing portfolio approved by its board for Nigeria at about $11.5bn.
The bank disclosed this during its Nigeria Development Update virtual event, which had the theme ‘Rising to the challenge: Nigeria’s COVID-19 response’.
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In his presentation at the event, an economist with the bank, Marco Hernandez, stated that before the COVID-19 pandemic, about two million Nigerians were expected to fall into poverty in 2020 as population growth outpaced economic growth.
“With the COVID-19, the recession is likely to push an additional 6.6 million Nigerians into poverty in 2020, bringing the total newly poor to 8.6 million this year.
“This implies an increase in the total number of poor in Nigeria from about 90 million in 2020 to about 100 million in 2022. Northern states are more likely to be affected.”
On factors that explain the increase in poverty, the bank said having a vulnerable employment, receiving fewer remittances, and being close to the poverty line were some of the factors.
It said Nigeria’s economy had been hit hard by COVID-19, adding that in 2020, it recorded its deepest quarterly contraction since the 1980s.
The bank said job quality in Nigeria had worsened with more workers engaged in precarious work in the agricultural sector.
In terms of the portfolio size of the bank in Nigeria, the World Bank Country Director, Shubham Chaudhuri, said,
“There are actually three different ways of looking at the size of our portfolio.
“The first is how much concessional finance. If you look at how much our board has approved in terms of this financing, at the middle of 2018, is about $7bn.”
“Since then and up till now, they’ve approved another $3bn in terms of financing. So, that brings us to $10bn and then with the $1.5bn that’s being considered in December, it will take it to somewhere around $11.5bn. That’s what the board has approved.”
On the $1.5bn loan which Nigeria is expecting from the World Bank, Chaudhuri said the facility was still in the works.