The World Bank has said that the Federal Government’s response to inflation is inadequate as the country continues to suffer double-digit inflation.
According to the lending bank, inflation is currently pushing many Nigerians into poverty and food insecurity.
The Washington-based bank said this in its latest Nigeria Development Update report, titled, ‘The Continuing Urgency of Business Unusual’.
The report read in part, “Despite the urgency, the authorities’ response over the last two years has not been adequate, and inflation has increased and fuelled poverty and food insecurity.”
The financial institution further said that the inflation shock is projected to push about 15 million more Nigerians into poverty between 2020 and 2022.
The Washington-based bank added, in a different report, that the number of poor Nigerians is projected to hit 95.1 million in 2022, warning that many non-poor Nigerians were only one small shock away from falling into poverty.
According to the lender, such a shock can be induced by the issues of climate or conflict which could further threaten Nigeria’s poverty reduction efforts.
The bank also noted that the COVID-19 pandemic-induced inflation pushed about 23 million Nigerians into a food crisis in 2021.
In the previous edition of the NDU report, the World Bank had said the Federal Government of Nigeria did not take any concerted action towards curbing inflation in 2021 despite the inflation shock pushing an estimated eight million Nigerians below the poverty line.
The World Bank warned that without any decisive action, the average inflation rate would not reach the single-digit target of the Central Bank of Nigeria by the end of 2022.
The CBN had recently projected that the country’s inflation rate would drop to a single digit in 2022, with the full implementation of its recent policies designed to boost different sectors of the economy.
However, a United States-based magazine, Global Finance, agreed with the World Bank, saying the CBN had failed to curb rising inflation and stop the naira from sliding against the dollar.
Although the World Bank says inflation in 2022 is projected to be 15.5 per cent, Nigeria’s inflation as of May this year is 17.71 per cent, which is higher than the World Bank’s projection.
The World Bank said Nigeria might have one of the highest inflation rates globally in 2022, with increasing prices diminishing the welfare of Nigerian households.
Like the World Bank, the International Monetary Fund has said that the rate of inflation in Nigeria is expected to remain elevated in 2022.