The new World Bank report paints a bleak picture of Nigeria
A new World Bank report from Nairametrics has painted a very bleak picture of the economy today and tomorrow. According to the World Bank, Nigeria is “facing what may be the worst downturn in four decades ... even if the outbreak is contained”.
The report was included in an “ALIPA Webinar” webinar presentation on August 27, 2020.
According to the World Bank, the double blow of the drop in oil prices and the COVID-19 pandemic has put Nigeria on the path to economic ruin and may not come out quickly if no major policy changes are made. The report noted that the collapse in oil prices is destabilizing the economy and affecting budget and external balances and growth.
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It has also been complained that the Covid-19 pandemic is reducing remittances and increasing household income and consumption losses. It was also suggested that foreign capital inflows are also likely to decline, adding pressure on external payments.


With all these bleak projections, 2020 GDP is projected to decline by -3%, "which may trigger the worst recession in four decades". The National Bureau of Statistics reported Monday that the Nigerian economy contracted 6.1% in the second quarter of the year due to the Covid-19 pandemic and the drop in oil prices.
The consequences of an economic contraction
Jobs that are already scarce due to the 2016 recession will be all the more difficult to find
Many Nigerians are expected to fall into poverty with falling incomes as the population continues to rise
Women and workers in the informal sector are likely to be more affected
The presentation also suggested what Nigeria needs to do to get out of the forest.
Contains the COVID-19 outbreak and is preparing for a more severe outbreak.
Improving macroeconomic management to increase investor confidence
Secure and mobilize income
Re-prioritize public spending to protect critical development spending
Supporting economic activity and helping poor and vulnerable communities
Major policy changes proposed for Nigeria
The World Bank also outlined proposals for Nigerian foreign exchange management, as well as some of its economic policy measures
Unify exchange rates in a single window and now increase exchange rate flexibility before foreign exchange reserves continue to run and the pressure mounts for a much larger and disruptive devaluation that would harm the poor
Loosen foreign exchange restrictions to contain inflationary pressures and increase the supply of food and essential staples (e.g. health-related products).
Realignment of monetary policy management towards the main goal of price stability
Phasing out land borders to contain inflation and direct private sector development towards more competitive goals
Continue to make public debt management more transparent
Review regulatory requirements related to bank sales of bad loans to AMCON and similar companies to transparently streamline the process for efficient bad debt settlement