Nigeria Economic Update: World Bank Cites Positive Economic Trends and Progress in Poverty Reduction
July 22, 2014
ABUJA, Nigeria, July 22, 2014 – Nigeria’s short term macroeconomic outlook improved in the first half of 2014 relative to 2013, says the World Bank in its new Nigeria Economic Report (NER) launched today in Abuja. The report indicates that revenues to the federation have increased, foreign reserves have stabilized, the Excess Crude Account (ECA) has been augmented, and prospects for growth are stronger than last year.
The re-based GDP estimates reveal a larger, more dynamic and complex economy than did previous statistics. The report however, stresses that macroeconomic risks remain due to uncertainty about future oil output, oil prices, and short term capital flows.
The NER analyzes new data from household surveys in 2010/2011 and 2012/2013 to reassess poverty and living standards in Nigeria and concludes that poverty rates in Nigeria are likely significantly lower than previously believed, and progress toward poverty reduction may be stronger. According to the report, poverty reduction in Nigeria appears to be primarily an urban phenomenon, with poverty rates in rural areas higher, and poverty reduction slower.
While recent panel surveys indicate that the per capita national poverty rate based on the official poverty line may now be as low as 33.1%, a large share of the Nigerian population is still not far above the poverty line, indicating vulnerability.
“The combination of the new GDP and poverty estimates is valuable in giving us what we believe to be a clearer picture of development and poverty reduction in Nigeria,” said John Litwack, Lead Economist and Acting Country Manager of the World Bank. “Both sets of numbers indicate the prime importance of urban areas for growth and poverty reduction.”
The NER also highlights continuing differences between Nigeria’s regions in poverty reduction. The South and North Central regions show progress in poverty reduction between 2010 and 2013, while the North West witnessed little change, and the North East experienced an increase in the poverty rate along with a general decline in living standards.
“Improvements in public services, key infrastructure to better connect markets, and measures to increase productivity in agriculture could help put Northern regions on a strong path toward poverty reduction”, said Mr Litwack, lead author of the report, whilst also noting the critical role of security.