THE World Bank says the Federal Government of Nigeria did not take any significant action to reduce inflation in 2021, despite inflation shock putting an estimated eight million Nigerians below the poverty line,
This was said in the current edition of the Washington-based bank’s ‘Nigeria Development Update’ report 2021.
It said, “Double-digit inflation rates are depressing economic activity and exacerbating poverty. Rising food prices are eroding household purchasing power, and we estimate that during 2020 and 2021, the ‘inflation shock’ alone pushed about eight million more Nigerians below the poverty line.
“We have revised our inflation forecast upwards from our June projection because (i) the inflation rate is declining more slowly than initially expected, and (ii) during 2021 the government did not take concerted action to curb inflation.”
The World Bank warned that unless immediate action is taken, the average inflation rate will not reach the CBN’s single-digit objective by the end of 2022.
It said, “Without decisive action, the average inflation rate for 2021 will exceed that for 2020 and will be unlikely to approach the CBN’s target range of 6–9 per cent by end-2022.
“The inflation rate has not fallen to 9 per cent since 2014, but in a hypothetical scenario where the inflation rate would have been close to the CBN’s goal of 9 per cent in 2020 and 2021, the consumption level of the average Nigerian would have been at least 15 per cent higher today.”
With the complete execution of the CBN’s recent measures aimed at boosting various sectors of the economy, the country’s inflation rate is still expected to decline to single digits in 2022.
Global Finance, a US-based publication, concurred with the World Bank, stating the CBN had failed to contain growing inflation and prevent the naira from depreciating against the dollar.
The World Bank went on to say that Nigeria might have one of the highest inflation rates in the world by 2022, with increasing prices diminishing Nigerian citizens’ welfare.
According to the research, Nigeria is also expected to have the fifth highest inflation rate among Sub-Saharan African countries in 2022.
