- Reveals How Policies Limit Trades
- Trade Can Be A Pathway To Poverty Reduction
The World Bank has raised an alarm that Nigeria’s poverty reduction goals are threatened by the Russia-Ukraine war, COVID-19 pandemic, and rising inflation.
World Bank economists, Jonathan Lain and Jakob Engel made this known in a recent blog post.
The Washington-based institution, however, said trade could be a vital solution.
It said through its effects on investment, technology transfer, and competition, trade can help growth, boost job creation, increase domestic value-added, and reduce the price of goods that Nigerians buy along the way.
“Nigeria’s aspiration to lift all of its people out of poverty by 2030 presents a serious challenge,” the bank said.
“Even before COVID-19, four in 10 Nigerians lived below the national poverty line – some 80 million people.
“The global pandemic, rising inflation, and ongoing uncertainty related to the war in Ukraine – combined with relentless population growth – have made Nigeria’s poverty-reduction goals more challenging than ever.
“In Nigeria, many policies limit trade; the country is not unique in this regard, as protectionist policies have been on the rise the world over and the ongoing war in Ukraine could intensify this.
“Throughout the past two decades, import bans, tariffs, and foreign exchange restrictions have all curbed the flow of goods into Nigeria.
“These restrictive policies culminated in Nigeria closing its land border for more than a year in August 2019. Nigeria is also currently negotiating the terms of its participation in the African Continental Free Trade Agreement (AfCFTA); therefore, discussions of trade policy are very topical.”
According to the World Bank, specific government policies may therefore be needed if the gains of trade liberalisation are to be reaped in Nigeria.
It recommended the provision of social protection to support those households whose wellbeing is under threat.
It also advised the government to implement deeper reforms such as improving interstate labour mobility and helping workers reskill themselves for sectors in which jobs and incomes benefit from greater exposure to international markets.
“Also, broader reforms that foster sustainable growth and share its proceeds to poor and vulnerable Nigerians could help those households that might lose out if the trade is liberalized; these include macroeconomic reforms that diversify the economy away from oil, spur structural transformation, and boost wage job creation as well as investment in infrastructure to help households access markets and economic opportunities,” the bank said.
“With the right mix of complementary policies, Nigeria can take advantage of trade as a pathway to poverty reduction.”
In June 2021, President Muhammadu Buhari launched a steering committee on national poverty reduction with growth strategy (NPRGS).
He said the committee will address his commitment to lifting 100 million Nigerians out of poverty in 10 years, with a well-researched framework for implementation and funding.
Meanwhile, the Federal Executive Council (FEC) received a report Nigeria recorded a 3.1 per cent economic growth in the first quarter of 2022 at its weekly meeting on Wednesday.
Zainab Ahmed, the minister of Finance, Budget and National Planning, made the declaration at the end of the meeting presided by Vice President Yemi Osinbajo.
The minister noted, however, that the report showed contractions in some sectors of the economy.
“The Federal Executive Council received a report from the Ministry of Finance, Budget and National Planning for the first quarter of 2022.
“I know that this report has been out in the media since last week Monday, but because we didn’t have FEC meeting last week we presented it today.
“The report shows that the economy grew by 3.1 per cent in the first quarter of 2022 compared to a growth of 0.5 per cent in the corresponding period in 2021.
“This growth shows a gradual economic stability from the recession that we witnessed in 2020; and also it shows the sixth quarter of positive growth that the Nigerian economy has presented,’’ she said.
Mrs Ahmed added that of the 46 economic activities, the bulk sector performance showed that the services sector grew strongly by 4.7 per cent; agriculture grew by 3.61 per cent while industry contracted by -6.81 per cent.
According to her, there is also a significant contraction in the crude oil, petroleum and natural gas sector by -26.04 per cent.
“Coal mining sector also declined, while oil refining recorded the biggest contraction of -44.26 per cent.
“There has been growth in some sectors; there are significant contractions in others, but the net effect is positive growth.
“We are very mindful of the fact that unless we have most of the sectors growing, especially growth in jobs impacted sectors, the positive growth will not be directly felt by the people.
“We also reported to Council that inflationary rate had started going upward to the extent that the CBN had to adjust Monetary Policy Rate to 13 per cent.
“The adjustment was made at the CBN’s last Monetary Policy Committee meeting to manage the cost of inflation.
“Council has decided to step up special efforts to look at sectors that are not growing and also to look at how we can grow the other sectors better,’’ she said.
The minister said that council also decided that the National Food Security Council would very quickly meet to address the issue of inflation in the prices of foodstuff.