Aftermath of COVID-19 pandemic, rising inflation, and ongoing uncertainty around the Russia-Ukraine war have been described as great challenges compounding poverty and thereby complicating the reduction in Nigeria.
This was the submission given by the World Bank.
World Bank economists, Jonathan Lain and Jakob Engel, while disclosing this in a blog presentation titled, “Barriers to trade, barriers to poverty reduction? How Nigeria can harness trade to lift people out of poverty”, however indicated that Nigeria can spread its tentacle by harnessing trade to tackle poverty in the country.
The report stated: “Nigeria’s aspiration to lift all of its people out of poverty by 2030 presents a serious challenge. Even before COVID-19, four in 10 Nigerians lived below the national poverty line – some 80 million people.
“The global pandemic, rising inflation, and ongoing uncertainty related to the war in Ukraine – combined with relentless population growth – have made Nigeria’s poverty-reduction goals more challenging than ever”
The effects of trade on investment, technology transfer, and competition was highlighted at the presentation as a panacea that could ginger the economic growth if harnessed.
It stated: “Trade presents one vital but often untapped pathway to poverty reduction. Through its effects on investment, technology transfer, and competition, trade can help growth – boosting job creation, increasing domestic value added, and reducing the price of goods that Nigerians buy along the way. All of these effects may contribute to reducing poverty.
According to the World Bank’s economists, specific government policies may therefore be needed if the gains of trade liberalisation are to be reaped in Nigeria.
“In the short term, this could include social protection to support those households whose wellbeing is under threat. Yet in the medium and long term, deeper reforms will be needed: this includes improving interstate labor mobility and helping workers re-skill themselves for sectors in which jobs and incomes benefit from greater exposure to international markets.
Also, broader reforms that foster sustainable growth and share its proceeds to poor and vulnerable Nigerians could help those households that might lose out if trade is liberalized; this includes macroeconomic reforms that diversify the economy away from oil, spur structural transformation, and boost wage job creation as well as investment in infrastructure to help households access markets and economic opportunities.
“With the right mix of complementary policies, Nigeria can take advantage of trade as a pathway to poverty reduction.”