The World Bank has predicted tougher months ahead as household real disposable incomes in Nigeria are expected to face an ‘exceptional squeeze’.
The World Bank’s Country Director for Nigeria, Shubham Chaudhuri, who disclosed this in Abuja, indicated that the Covid-19 crisis in the country exacerbated pre-existing structural distortions (including trade distortions, such as 2019’s border closure), which were already driving up prices and eroding purchasing power before the pandemic.
This in turn explains the near-stagnation in household real disposable incomes that have preceded the exceptional squeeze expected this year,” Chaudhuri said.
“However, the extent to which the ongoing Russia-Ukraine war would drive the economy further into poverty as well as permanently making it less productive is still unknown”, he added.
The World Bank, in its latest report titled: ‘Nigeria Poverty Assessment 2022’, said many primary effects of the pandemic had been more economic-related rather than health-related, partly due to Nigeria’s pre-crisis conditions.
“In the more recent stages of the Covid-19 crisis, even though economic activity began to recover, inflation started to accelerate especially for food items that are crucial for consumption among the poor and vulnerable”, it stated.