Fuel subsidy removal: 101m Nigerians will enter poverty if palliative is not provided

The World Bank has stated that Nigeria has one of the highest inflation rates, which has pushed around four million people into poverty between January and May 2023.

The international financial institution disclosed this on Tuesday, June 27, 2023.

It also said about 7.1 million Nigerians would become poor if the Federal Government will not compensate or provide palliatives for them due to fuel subsidy removal.

In a data released by the financial institution, 89.8 million Nigerians were poor as at the beginning of 2023 as it also stated that additional four million Nigerians became poor between January and May 2023, raising the figure to 93.8million.

Latest projection means the number of poor Nigerians will rise to 100.9 million if the government fails to compensate vulnerable citizens for fuel subsidy removal.

The World Bank Nigeria Development Update report also noted that Nigeria’s inflation has risen to a 17-year high, and has been driven by a number of factors, such as the Central Bank of Nigeria (CBN) funding of budget deficit, previous multiple exchange rates, devaluation, and trade restrictions.

“The consumer price index further accelerated in 2023 through May, up to 22.4 percent year over year. High inflation has been driven by the monetization of the fiscal deficit by the CBN, multiple exchange rates and exchange rate depreciation in the parallel market, and intensified trade restrictions, exacerbated by the spike in global food and energy prices.

“The CBN implemented measures to control rising inflation, including raising the monetary policy rate by 700 basis points, but these proved ineffective and monetary policy remained loose overall in the first half of the year. The loss of purchasing power from high inflation has increased poverty in the short-term, pushing an estimated 4 million Nigerians into poverty between January and May 2023.”

The National Bureau of Statistics (NBS) recently disclosed that inflation in the country rose to 22.41 per cent in May 2023, which is the highest in about 19 years. In its National Multidimensional Poverty Index report, it disclosed that 133 million Nigerians are multi-dimensionally poor.