The World Bank has stated that Nigeria’s economic prospects are improving but the country’s economy is still fragile.
This is coming as part of the World Bank’s Nigeria Development Update (NDU) report which surmised that the economic reforms embarked upon by the government are starting to improve Nigeria’s economic prospects.
This sentiment was expressed during the official presentation of the report at the Lagos Business School recently.
Nigeria’s Economic Reforms
Over a year ago, Nigeria undertook reforms including the liberalization of the exchange rate by the central bank consolidating the multiple exchange rate systems hitherto operational in the country into a unified market. This initiative was primarily due to the significant depreciation of the naira. Under the naira float, the plan was to allow the market forces of demand and supply to determine the value of the naira.
The Country has also cleared up its Foreign Exchange backlog of $ 7 billion in claims, having made it a priority to restore credibility and confidence in the Nigerian economy in addition to the removal of the petrol subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022 due to its unsustainability.
The current administration has also focused on ending deficit monetization and returning the CBN to its core mandate of price and financial stability all in the aim of boosting the economy.
Nigerian Development Update (NDU) Report
Speaking at the report launch, Alex Siernart, Lead Economist, World Bank Nigeria noted Nigeria is already reaping the gains of the subsidy removal typified by an increase in government revenue.
“This (Nigeria’s) surge in revenue is largely due to the removal of the implicit FX subsidy that was happening before which was even larger than the Petrol subsidy that we talk about.
On the same note, Yemi Cardoso, Governor of the Central Bank stated “…. If you look at the competitiveness of Nigerian products as a result of the exchange rate having moderated the way it has, you will see that our goods would definitely become more competitive which discourages excessive import that you really don’t need and strengthen the economy.”
Additionally World Bank Senior Vice president, Indermit Gill states “For a big Country and economy like Nigeria, the reforms would come quicker.
“A smaller country would have a heart attack, but on the other hand big country attracts attention.
“you would find that in Nigeria, there is this effort to improve the economy right now.”
