Africa (Commonwealth Union) _ In its latest half-yearly report, the World Bank has acknowledged the efforts made by President Bola Ahmed Tinubu’s government to improve Nigeria’s economic situation. However, it insists on the need for further reforms, emphasizing the importance of implementing fiscal and monetary measures in the short and medium term.
Shubham Chaudhuri, the Bank’s Director in Nigeria, stressed the urgency to “turn the corner” and expects tangible results in the continent’s largest economy, which faces significant poverty levels.
Since President Tinubu assumed office in May, his government has launched two major reforms aimed at restoring public finances and attracting foreign investment: the end of fuel subsidies and the liberalization of the national currency, the naira. These measures had an immediate impact, with fuel prices tripling and inflation surging to over 27% in October year-on-year.
Despite recognizing the reforms as “essential” and “going in the right direction,” the World Bank calls for additional measures, particularly addressing the “lack of transparency on oil revenues” and the gains made to public finances through ending fuel subsidies.
Poverty in Nigeria, Africa’s most populous country, has increased from 40% in 2018 to 46% in 2023, affecting 104 million people compared to 79 million five years earlier. The World Bank’s recommendation for annual growth of 3.5% over the next few years, with the implemented reforms, signals a positive outlook for Kenya’s economic trajectory. These reforms can potentially contribute to sustained and improved economic performance, supporting the country’s development goals. The challenge lies in effective implementation and monitoring to ensure the desired outcomes are realized.
President Tinubu, presenting his budget to parliament in November, asked for the population’s patience, assuring them that the negative effects of the measures would be temporary. He expects inflation to fall to 21.4% and anticipates a growth rate of at least 3.76% in 2024.
