The World Bank has indicated that about 95.7 million Nigerians will live below the poverty line by 2022 after it had accessed the impact of the COVID-19 pandemic.
The World Bank revealed this in a report it recently released, where it stated that 90 million Nigerians were already predicted to live in extreme poverty of less than a dollar a day without the COVID-19 outbreak, but with the dreaded disease, the number has risen by an additional six million people.
“With real per capita GDP growth forecast to be negative in all sectors in 2020, poverty will deepen for the current poor, while those households that were just above the poverty line prior to the COVID-19 crisis will fall into poverty,” the World Bank said.
“Were the crisis not to have hit (the counterfactual scenario), the poverty headcount rate would be forecast to remain virtually unchanged, with the number of poor people set to rise from 82.9 million today to 85.2 million in 2020and 90.0 million in 2022 due to natural population growth.”
Breaking down the effects of the crisis, the World Bank stated that the national poverty headcount rate forecast is expected to jump from 40.1 percent to 42.5 percent in 2020 and 42.9 percent in 2022, implying that the number of poor people will be 90.2 million in 2020 and 95.7 million in 2022.
It said the crisis alone is forecast to drive an additional 4.9 million people into poverty this year, with an additional 5.7 million people living in poverty by 2022.
In a report, the World Bank group report further explained that a disproportionate share of those pushed into poverty by the COVID-19 crisis would likely be those living in urban areas and earning income from services.
While stating that just 15.9 percent of the current poor are urban dwellers, the bank predicted that more than one-third of the additional people forecast to be pushed into poverty by the COVID-19 crisis are expected to be in urban areas.
“Only 13.1 percent of the additional poor people in 2022 are predicted to be in households where the head works primarily in agriculture, while, today, 56.0 percent of poor Nigerians live in agricultural households,” it said.
“Many Nigerians who are not poor today are vulnerable to falling below the poverty line during the COVID-19 crisis. People living only just above the poverty line are more susceptible to becoming poor when shocks occur. Those with consumption levels between the poverty line and 1.5 times the poverty line may be defined as ‘vulnerable.”
It added that 40.1 percent of Nigerians (82.9 million people) live below the poverty line, while another 25.4 percent (52.6 million people) are vulnerable.
It revealed that more than three-quarters of the population in rural areas, were either poor or vulnerable, yet even in urban areas— where the poverty headcount rate was far lower at 18.0 percent—around a quarter of the population would be vulnerable to shocks.
The report further noted that most Nigerian workers especially those in poor households were employed in agriculture or non-farm enterprises, which might be more susceptible to the COVID-19 crisis.
The global financial institution stated that just 16.8 percent of working Nigerians (12.9 million workers) were employed primarily in wage jobs, according to the 2018/19 Nigeria Living Standard Survey (NLSS) while around 42.7 percent work primarily in agriculture (32.7 million workers), and 40.6 percent work primarily in non-farm enterprises (31.1 million workers).
The report observed that social distancing measures posed a serious threat to non-farm enterprises that relied on face-to-face interactions with customers, as well as those agricultural workers that needed to buy inputs and sell produce.
In another report, the World Bank stated that with the uncertainty of the long-term economic impact of the global COVID-19 pandemic, the speed, quality and sustainability of Nigeria’s economic recovery will be determined by the effectiveness of its government’s response.
The Nigeria Development Update, Nigeria in Times of COVID-19: Laying Foundations for a Strong Recovery says the global spread of the pandemic and the subsequent collapse of international oil prices are destabilizing Nigeria’s macroeconomic balances, the World Bank said.
“Before COVID-19, the number of Nigerians living in poverty was expected to increase by about two million, largely due to population growth.”
“Without bold reforms, strong fiscal and monetary policy actions, the report warns that the macroeconomic implications of COVID-19 in 2020 and 2021 will be severe—including the loss of life, and the possibility of five million more Nigerians being pushed into poverty—even if Nigeria manages to contain the spread of the virus.”