Development report, released Tuesday. The report identified the measures taken by the government to address the economic challenges brought about by the pandemic.
“In 2020, the Nigerian government began to address long-standing macroeconomic challenges by harmonizing the two major exchange rates, adjusting electricity tariffs to tiered levels that reflect costs, reducing non-essential spending, redirecting budgetary resources towards the COVID19 response at federal and state levels, strengthening debt management and increasing transparency of oil and gas operations, ”he said.
He noted that some macroeconomic challenges had emerged that undermined efforts towards economic recovery. The World Bank said, “However, the reform momentum weakened in 2021 and, in the absence of continued progress, major macroeconomic challenges have re-emerged as major threats to growth.
“Problems related to the predictability and credibility of the exchange rate, the insufficient supply of foreign currency, the unsustainable subsidy of the premium automobile, the severe trade restrictions and the large financing of the budget deficit by the Central Bank of the Nigeria continues to undermine the business environment, exacerbating the underlying constraints related to governance and the provision of public services.
The report says that despite an initial strong recovery and recovering global oil prices, the stalled reform program has undermined Nigeria’s long-term growth prospects.
World Bank Country Director for Nigeria Shubham Chaudhuri said slow economic reforms are preventing the country from reaching its growth potential. He said: “Even though the Nigerian economy has come out of an induced recession but many challenges still persist like double-digit inflation, falling incomes and rising insecurity.
”While the government has taken bold policy steps to mitigate the impacts of the COVID19 crisis, the momentum for reforms has slowed, hampering the capacity of the country to reach its growth potential.