The World Bank has advised the Federal Government to unify the nation’s multiple exchange rate windows and carry out a number of other reforms to strengthen the economy and restore macroeconomic stability.
The Washington-based lender made this
known in its latest Macro Poverty Outlook for Nigeria;
April 2023, also said implementing economic
reforms in the non-oil revenue space would reduce fiscal and debt pressures
alongside the planned removal of fuel subsidies by the Federal Government.
The bank had said the worsening economic
environment in the country had pushed millions of Nigerians into poverty
through chronically high inflation that has been on the rise since 2019,
especially for food items, eroding the purchasing power of poor and vulnerable
Nigerians and increasing poverty.
The inflation reached an annual average of
18.8 percent in 2022, a 21-year high, with food inflation in 2022 estimated to
have pushed five million Nigerians into poverty.
But outlining additional solutions to the
proposed subsidy removal which is expected to drastically increase inflation,
the World Bank advised the government to restore macroeconomic stability to
help cushion its effects.
It read; “Macroeconomic stability has
weakened amidst declining oil production, costly fuel subsidies, exchange rate
distortions, and monetization of the fiscal deficit.
The authorities can strengthen the economy by
restoring macroeconomic stability through reforms to increase oil and non-oil
revenues, tighten monetary policies to reduce inflation and unify the multiple
FX windows and adopt a single, market-responsive exchange rate.”
It added that increased insecurity as well as
adverse climate change effects could further dampen the economic outlook for
Nigeria.
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