The World Bank says if decisive action is not taken, the average inflation rate would not reach the single-digit as projected by the CBN.
The World Bank says the Federal Government of Nigeria did not make any concerted effort in 2021 towards curbing the rising inflation, adding that an estimated 8 million Nigerians have been pushed below the poverty line.
The bank said this in its latest edition of its ‘Nigeria Development Update’ report 2021.
It said, “Double-digit inflation rates are depressing economic activity and exacerbating poverty. Rising food prices are eroding household purchasing power, and we estimate that during 2020 and 2021, the ‘inflation shock’ alone pushed about eight million more Nigerians below the poverty line.
“We have revised our inflation forecast upwards from our June projection because (i) the inflation rate is declining more slowly than initially expected, and (ii) during 2021 the government did not take concerted action to curb inflation.”
With the full implementation of its recent policies, the Central Bank of Nigeria (CBN) had recently projected that the country’s inflation rate would drop to a single digit in 2022.
But the World Bank warned that if decisive action is not taken, the average inflation rate would not reach the single-digit as projected by the CBN.
“Without decisive action, the average inflation rate for 2021 will exceed that for 2020 and will be unlikely to approach the CBN’s target range of 6–9 per cent by end-2022.
“The inflation rate has not fallen to 9 per cent since 2014, but in a hypothetical scenario where the inflation rate would have been close to the CBN’s goal of 9 per cent in 2020 and 2021, the consumption level of the average Nigerian would have been at least 15 per cent higher today.”
With increasing prices worsening the welfare of Nigerian households, the World Bank said Nigeria might have one of the highest inflation rates globally in 2022.
