₦airaland Forum

…says worsening economic environment leaving millions of Nigerians in poverty

The World Bank says Nigeria’s constant fiscal deficit has worsened the nation’s public debt stock, with 96.3 per cent of government revenue spent on servicing debt in 2022.

This was according to the Macro Poverty Outlook for Nigeria: April 2023 brief released by the bank.

The report read in part, “The fiscal position deteriorated. In 2022, the cost of the petrol subsidy increased from 0.7 per cent to 2.3 per cent GDP. Low non-oil revenues and high-interest payments compounded fiscal pressures. The fiscal deficit was estimated at 5.0 per cent of GDP in 2022, breaching the stipulated limit for federal fiscal deficit of 3 per cent. This has kept the public debt stock at over 38 per cent of GDP and pushed the debt service to revenue ratio from 83.2 per cent in 2021 to 96.3 per cent in 2022.”




The bank also said that the cash scarcity created by the CBN’s naira redesign policy hampered the country’s economic growth and poverty reduction efforts, adding that about 13 million Nigerians would become poor between 2019 and 2025.

It noted, “Nigeria is in a more fragile position than before the late 2021 global oil price boom. Growth and poverty reduction have further been affected by cash scarcity in the context of the Naira redesign. The economy is projected to grow by an average of 2.9 per cent per year between 2023 and 2025, only slightly above the population growth rate of 2.4 per cent. Growth will be driven by services, trade, and manufacturing. Oil production is projected to remain subdued in part because of inefficiencies and insecurity.

“With Nigeria’s population growth continuing to outpace poverty reduction and persistently high inflation, the number of Nigerians living below the national poverty line will rise by 13 million between 2019 and 2025 in the baseline projection.”


The World Bank also said that the worsening economic environment in the country had pushed millions of Nigerians into poverty.

The brief read, “Oil price booms have previously supported the Nigerian economy, but this has not been the case since 2021. Instead, macroeconomic stability has weakened amidst declining oil production, costly fuel subsidies, exchange rate distortions, and monetization of the fiscal deficit. The deteriorating economic environment is leaving millions of Nigerians in poverty. Risks are tilted to the downside given the lack of macro-fiscal reforms, the naira demonetization, and an uncertain external outlook.”

The Washington-based bank further noted that macroeconomic stability has weakened considerably due to multiple FX rates, high and increasing inflation, rising fiscal pressures, and declining forex reserves.

It noted that Nigeria’s fiscal position has deteriorated since 2015 due to declining oil revenues and rising expenditures, resulting in persistently high fiscal deficits.

The bank also said that Nigeria’s chronically high inflation has been on the rise since 2019, especially for food items, eroding the purchasing power of poor and vulnerable Nigerians and increasing poverty.

The lending institution said that inflation reached an annual average of 18.8 per cent in 2022, a 21-year high, with food inflation in 2022 estimated to have pushed five million Nigerians into poverty.

It added that multiple FX windows, the central bank’s provision of development finance at subsidized rates, and monetization of the fiscal deficit compromise the effectiveness of monetary policy in the country.


The brief also stated, “Persistent structural economic issues (volatile growth, low private investment, low and inefficient public spending, due to low revenue collection, and low social development outcomes leading to low productivity) have prevented any meaningful acceleration of growth. Insecurity remains widespread, with more violent conflict events occurring across the country, adversely impacting private investment and growth.”

https://punchng.com/nigerias-96-revenue-used-to-service-debt-in-2022-world-bank/

😎

Buhari has finally buried Nigeria 😪

Why destroy Nigeria because of disintegration (succession), Buhari is using debt and borrowing to keep the Unity of Nigeria says Pastor Enoch Adebayo.

No country being owed by Nigeria will support its disintegration among the international community. Unless the disintegration will come with total debt forgiveness.

Buhari needs to be in jail

Just imagine over 200million people share only 4% of her countries total revenue and one calamity go come here now to talk of continuity for the same APC.
NA HIM BE SEY UR HEAD NO CORRECT!!!

We are stuck but we dont know yet. When are we going to pay all these back.

Buhari from day one was a disaster waiting to happen.

The painful thing is despite all this Buhari still has supporters

SalamRushdie:
The painful thing is despite all this Buhari still has supporters

Whilst Zimbabweans were starving due to Mugabe's intransigence, members of his Shona ethnic group continued to back him.
One thing I have learned from politics is the resilience of ethno-religious sentimental support even in the face of dire reality.

Deregulation of naira loading

SalamRushdie:
The painful thing is despite all this Buhari still has supporters

And his supporters are crying of inflation

Tinubu said he will continue where Buhari stopped

Affliction shall never arise

It is as a result of the fashola group who were defending the importance of accumulating debts to be normal since america has debts and has not failed.
Well
Here we dey

The incoming get work.if it is interested in solving problems o

Remember that Nigeria has already experience recession twice

baralatie:
The incoming get work.if it is interested in solving problems o

As it stands now nobody can solve Nigeria's problem, Nigeria is building on a faulty foundation , Nigeria needs a complete new restructuring right from the foundation

4Play:
Whilst Zimbabweans were starving due to Mugabe's intransigence, members of his Shona ethnic group continued to back him.
One thing I have learned from politics is the resilience of ethno-religious sentimental support even in the face of dire reality.

Bro human psychology is something else, very confusing

Look how Buhari has rendered this country useless!

That man was the worst thing that ever happened to this country.

He has no atom of leadership skill in him at all!

Deepfeel:
As it stands now nobody can solve Nigeria's problem, Nigeria is building on a faulty foundation , Nigeria needs a complete new restructuring right from the foundation

Restructure won't even work.it will make the problem worse

it seems APC is doing more to destroy nigeria than boko haram could ever hope to achieve

A man has a wife and children and earns N100,000 per month, out of it N96,000 is used to pay for loans he collected and what is left is N4,0000.....wetin him, wife and children wan chop?

SalamRushdie:
The painful thing is despite all this Buhari still has supporters

Suffer head supporters who do not know anything about the economy but begging and causing nuisance is what they are good at.

SalamRushdie:
Bro human psychology is something else, very confusing

And intriguing.

baralatie:
It is as a result of the fashola group who were defending the importance of accumulating debts to be normal since america has debts and has not failed.
Well
Here we dey

People still claim that because developed economies like the US, Japan, and the UK have a lot of debt, it's ok for us.

They forget that debt sustainability is the key issue here especially when debt interest (both rate and amount) is high. Up until recently, Germany and Japan could borrow at negative interest rates! Which means the creditors paid them to lend to them. Nigeria is not in the same league, it's like comparing Kano Pillars to Real Madrid. Nigeria has low investor confidence with many Nigerians, including political leaders, desperate to locate their money/investment/property in safer economic climes like the UK and the US.

Mind you, these figures probably don't even include borrowing from the CBN which has been happening surreptitiously. If you include debt owed to the CBN, we are looking at $150bn in debt.

Also, much of the debt incurred has gone to finance consumption, or pay off older debt, so no chance of reaping return on investment.

It's a dire situation and I feel sorry for Nigerians as they don't know what is coming.

Does buhari know the meaning of inflation, debt to revenue, GDP growth. Buhari that was asked on live tv about inflation and his response was go to the farm.

baralatie:
Restructure won't even work.it will make the problem worse

False!!

That's the first solution if we really want to salvage this country.

SmallDick99:
False!!

That's the first solution if we really want to salvage this country.

if a country has a total debt of $101 billion what do you think is the solution?
T as t is #50 trillion in naira

Will restructure make #50 trillion disappear

baralatie:
if a country has a total debt of $101 billion what do you think is the solution?
T as t is #50 trillion in naira

Will restructure make #50 trillion disappear

Devaluation is always the imf recommended option, eliminating all forms of subsidies, increase vat, open up economy to more free trade, restructure debt. End result more poverty

[quote author=baralatie post=122577871]if a country has a total debt of $101 billion what do you think is the solution?
T as t is #50 trillion in naira
..

baralatie:
if a country has a total debt of $101 billion what do you think is the solution?
T as t is #50 trillion in naira

Will restructure make #50 trillion disappear

What I'm saying is, if we really want to get it right on the long run and build a sustainable economy, then we should start by restructuring this country.