The World Bank Group has raised concerns over rising inflation in Nigeria and other Sub-Saharan African countries, pointing that the situation is weighing on economic activity in the continent.
The Bank in a new report titled “Africa’s Pulse: An analysis of issues shaping Africa’s economic future,” said that the estimated per capita income growth of 0.7 per cent for Nigeria and the rest of Sub-Saharan Africa in 2022 is insufficient to meet the challenging goals of poverty reduction and shared prosperity in the medium to long term.
It stated that poverty reduction trends, which were already derailed by the pandemic, had slowed further.
According to the report, the pandemic has induced a lasting impact on long-term growth, affecting particularly the poorest people and increasing extreme poverty.
It added that the weak rebound of the Nigerian economy in the aftermath of the pandemic along with the setback from rising inflation was insufficient to undo pandemic-induced job and income losses.
The report partly read, “Rising inflation is weighing on economic activity in Sub-Sahara. The upward trend in inflation following the post-pandemic period was exacerbated by the war in Ukraine, soaring to record highs in many countries.
The escalation of the war has fueled a rise in commodity prices, particularly food and energy prices. High pass-through of food and fuel prices to consumer prices has caused headline inflation to spike.”
The World Bank also said rising inflation is weighing on economic activity in Nigeria, and that the upward trend in inflation following the post-pandemic period was exacerbated by the war in Ukraine.
The report states, “The escalation of the war has fueled a rise in commodity prices, particularly food and energy prices. High pass-through of food and fuel prices to consumer prices has caused headline inflation to spike.
The fiscal space to mount effective responses today is gone because of high levels of debt across Sub-Saharan African countries, rising borrowing costs, and depleted public savings.”