This was revealed in the bank’s poverty assessment study, titled ‘A Better Future for All Nigerians: 2022 Nigeria Poverty Assessment.
According to the research, the COVID-19 problem is driving up Nigeria’s poverty rate, putting more than 5 million people into poverty by 2022.
With real per capita GDP growth in all sectors expected to be negative in 2020, the bank predicts that poverty will have deepened for the present poor, while those households who were barely over the poverty line before to the COVID-19 crisis would likely slip into poverty.
“Were the crisis not to have hit (the counterfactual scenario), the poverty headcount rate would be forecast to remain virtually unchanged, with the number of poor people set to rise from 82.9 million in 2018/19 to 85.2 million in 2020 and 90.0 million in 2022, due largely to natural population growth,” the bank said.
“Given the effects of the crisis, however, the poverty headcount rate is instead projected to jump from 40.1 per cent in 2018/19 to 42.0 per cent in 2020 and 42.6 per cent in 2022, implying that the number of poor people was 89.0 million in 2020 and would be 95.1 million in 2022.
Taking the difference between these two scenarios, the crisis alone is projected to have driven an additional 3.8 million Nigerians into poverty in 2020, with an additional 5.1 million living in poverty by 2022.”
Declining Growth
Even before the COVID-19 incident, Nigeria’s economic performance was deteriorating, according to the research.
Between 2000 and 2014, Nigeria experienced a period of steady growth, with the economy growing at a pace of roughly 7% per year, outpacing the predicted annual population growth rate of 2.6 percent.
However, real GDP growth fell to 2.7 percent in 2015, then -1.6 percent in 2016, as global oil prices fell, causing Nigeria’s first recession in over two decades.
“Growth has not rebounded since,” the bank stated.
“It is lower than population growth and the growth performance of peer nations during the same time period.” This deterioration in overall development performance makes poverty reduction substantially more difficult.”
The World Bank added that Nigeria’s dependence on oil exports is one of the leading causes of its frail growth prospects, and it may also prevent any growth from being broad-based. In 2019, while oil represented just 10 percent of GDP, oil accounted for more than 80 percent of Nigeria’s total exports.
“Indeed, this has been true in every year since the 1970s,” the bank argued, noting that it leaves Nigeria’s economy extremely exposed to movements in global oil production and global oil prices.
Despite oil’s importance for exports, extractive industries are not a large employer in Nigeria, the bank said.
“This means any growth due to oil production would not necessarily be shared among workers and households: less than 1 percent of working Nigerians are employed in mining and extractives, with the share being even smaller among those from poor households,” it noted.
