By Fola James
An estimated 7 million Nigerians will be pushed into extreme poverty this year as a result of impact of the corona virus on the nation’s economy, the World Bank has said.
The bank said the collapse in oil prices coupled with the COVID-19 pandemic is expected to plunge the Nigerian economy into a severe economic recession, the worst in 40 years.
In a report released on Thursday titled “Nigeria In Times of COVID-19: Laying Foundations for a Strong Recovery,” the bank estimates that Nigeria’s economy would likely shrink by 3.2% in 2020, in the short run, that effort by the government to contain the virus from spreading will determine the size of the economy by the end of the year.
According to the bank’s country director Shubham Chauhuri “While the long-term economic impact of the global pandemic is uncertain, the effectiveness of the government’s response is important to determine the speed, quality, and sustainability of Nigeria’s economic recovery.
Besides immediate efforts to contain the spread of COVID-19 and stimulate the economy, it will be even more urgent to address bottlenecks that hinder the productivity of the economy and job creation.”
The report indicates that the human cost of COVID-19 could be beyond the loss of human lives, because “the COVID-19 shock alone is projected to push about 5 million more Nigerians into poverty in 2020,” the report said.
Before the COVID 19 pandemic, the bank has projected that 2 million Nigerians will go into extreme poverty but the figure has now risen to 7 million, considering that more than 5 million persons, particularly in the rural areas have been estimated to join the poverty league, experts say.
The report further stated that the pandemic is likely to disproportionately affect the poorest and most vulnerable, in particular women and School children who benefit from federal government national school feeding program.
Nigerians living on handouts from relatives and employed family members will also be hard hit, due to job losses and income that will make remittances impossible.
“Economic activities have been disrupted and women’s livelihoods have been particularly impacted. Over 40% of Nigerians employed in non-farm enterprises reported a loss of income in April-May 2020.
In addition, the fall in remittances is likely to affect household consumption because half of Nigerians live in remittance-receiving households, of which about a third are poor,” the report said.
The bank, however stated that the federal government has already risen up to the occasion by trying to put the economy back on track, adding that more efforts will be required to roll back the effects of the pandemic on the economy.
“The unprecedented crisis requires an equally unprecedented policy response from the entire Nigerian public sector, in collaboration with the private sector, to save lives, protect livelihoods, and lay the foundations for a strong economic recovery,” said Marco Hernandez, World Bank Lead Economist for Nigeria and co-author of the report.
