The World Bank has said that Nigerias poverty level increased slightly in 2017 despite emergence from recession.
The International financial institution stated this in its report, ‘Nigeria Bi-annual Economic Update’ released in Abuja on Monday, April 30, 2018.
The report also indicated that unemployment and underemployment rates increased in 2017.
Titled: ‘Connecting to Compete’, the report stated that Nigeria’s Gross Domestic Product growth reached 0.8%, driven by an expansion in oil output and continued steady growth in agriculture.
Highlights of the report are as follows:
- A decline in the non-oil, non-agriculture sector continued, as aggregate demand remained weak and private sector credit low.
- The rates of unemployment and underemployment increased in 2017 and poverty is estimated to have increased slightly.
- Gross Domestic Product growth in 2018 is expected to hover just over 2%, largely oil sector-driven.
- Nigeria is constrained by limited connective infrastructure, thereby reducing producers and firms’ ability to reach wider markets with its big home market.
- The lack of connectivity dampens economic collaboration and cooperation among the country’s regions, limiting market integration and reducing producers and firms’ ability to reach wider markets.
- Spatial fragmentation and limited connections also hurt welfare and prospects for poverty reduction.
Somik Lall, the Global Lead, Territorial Development, World Bank, said that spatial integration and sub-national specialisation were key to creating a nationally-integrated market for goods and services as well as attracting much-needed private investments, which in turn could enhance productivity through scale and specialisation.
Suggestions for policy makers
According to the World Bank, Nigeria will benefit from policies to promote spatial integration and sub-national specialisation, which will stimulate diversified and long-term growth.
This can be achieved through market specialisation and differentiated positioning strategies for industrial clusters across the country, according to the report.
The bank said the key challenge for policy makers at the federal and state levels was to identify interventions (policy, regulatory, institutional and investment, etc.) that were best suited to realise development potential of sub-national regions and integrate domestic markets.
For Nigeria to tap its spatial drivers of development, policy makers may want to focus on investments that reinforce clusters and economies of scale and optimise the connectivity between rural areas and the major urban markets, the bank said.
It added that policy makers must also address structural and land management issues in major urban nodes and along major growth corridors to remove or alleviate barriers that undermine the growth potential.
Recall that the International Monetary Fund, IMF, also identified global debt levels, geopolitical risks, and trade tensions as threats that may hinder growth projections of emerging and developing economies like Nigeria. The Lender, however, advised policy makers to seize current economic opportunities to bolster growth, make it more durable, and equip their governments better to counter the next downturn.