Nigeria needs to deepen economic reforms and boost government revenues in order to have a sustained recovery from the devastating impact of the coronavirus(Covid-19) pandemic on its economy, the World Bank has said. According to Reuters, the World Bank’s Country Director for Nigeria, Mr. Shubham Chaudhuri stated this in an interview with the news agency yesterday. He said Nigerians are aware they cannot simply wait for oil prices to recover as happened during the last crisis in 2016 to rebuild the economy, particularly with the health crisis caused by the pandemic.
The impact of the pandemic, coupled with the slump in the price of oil(the commodity that accounts for the bulk of government revenue and over 90 per cent of Nigeria’s forex earnings, has left the country facing a situation similar to the 1980s when it rationed foreign currency amid shortages caused by a recession and currency weakness. Nigeria’s current case is worsened by revenues of around 5% of GDP, which is one of the lowest in the world for similar size countries. The ratio stood at 8% last year before the pandemic.
Chaudhuri said the World Bank is considering a $3 billion budget support loan for Nigeria, which would cover around half of the country’s external financing shortfall. He added that approval was expected within the next three to four months. “To wait for oil prices to recover will be shortsighted and I think the government recognises this. It helps us make the case for providing the kind of financing the government has requested,” Reuters quoted him as saying.