Nigeria is going through another face of inflation that is constantly crippling the socioeconomic system. Some have regarded this situation as the most brutal inflation experienced in the country and the constant deterioration of the social and economic conditions evidently proves them right. In fact, the World Bank states that the country is in a worsening circumstance, with the economic performance gradually declining as the inflation persists. The World Bank made this known during its recently released Nigeria economic and development update which launched in Abuja alongside the Nigeria Country Economic Memorandum.
According to the Nigeria Development Update, it was reported that Nigeria was in an immensely deteriorating economic situation. It also noted that Nigeria’s economic performance which had been hugely affected during the previous Nigeria Development Update that was published in June 2022 and was titled “The Continuing Urgency of Business Unusual”. The country’s growth forecast was cut down to 3.1 percent from the previous 3.8 forecasted percent by the financial institution.
Nigeria’s N30,000 minimum wage now valued at N19,355.
It was noted that this revision was as a result of the slow economic development of the third quarter from the previous year which the oil sector and weak performances in other sectors of the economy contributed to this weak performance. The World Bank further forecast the economic growth to slow down by 2.9 percent by 2023. The report stated that the economic output growth slowed and as a result, the World Bank was reducing Nigeria’s economic growth projection. The domestic product of market prices in the third quarter of 2022 was 2.4 percent year-on-year.
World Bank Lead Economist for Nigeria, Alex Sienaert, whilst presenting this report, noted that Nigeria’s minimum wage of N30,000 could be valued at N19,355 today. That is, an evident loss of about 35.48 percent value between 2019 and 2022 due to the evading purchase power of inflation. It was also pointed that the heightened consumer price inflation was one of the highest in the world. The report posited that though the Central Bank of Nigeria (CBN) was making immense efforts to salvage the growing inflation by enforcing the increase of interest rate, the funding of fiscal deficits through the means advances had complicated the situation.
Surging consumer price inflation up 21.1%, a 17 years high.
It was further noted that the surging rate of consumer price inflation which was one of the highest in the world, accelerated in 2022 through October to be up 21.1 percent year-on-year, a 17 year high. It noted that although inflation was a persistent problem over the past 2 decades, the inflation since 2019 had increased significantly as a result of the multiple exchange rate and exchange rate depreciation in the parallel market. The reports indicated that the exchange rate policy setting in Nigeria were affecting business activities, growth and investment, as well as implementing macroeconomic risks.
The report again indicated that this inflation had pushed over five million Nigerians into poverty between January and October of 2022. Between 2020 and 2021, the World Bank estimated that the inflation pushed at least 8 million more Nigerians below the poverty ratio, increasing the poverty population in Nigeria to about 90 million. It was indicated that the country’s economy was immensely vulnerable to shock and warned that with the growing inflation and unemployment, the insecurity rate would only worsen.
Idahoans noted that Nigeria was in a runaway inflation situation.
As a result of these deteriorating realities in Nigeria, experts have continually questioned the government’s place in salvaging this situation. Gabriel Idahosa, the Deputy President of the Lagos Chamber of Commerce in an interview, questioned the government’s efforts as to the continued increase in the country’s inflation rate. He noted that the country was in a runaway inflation situation, where the inflation rate had become uncontrollable. The Director, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf also noted that the increasing inflation in the country had raised a major concern among stakeholders in the country.
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World Bank: Website
