World bank tells Nigeria to reduce borrowing

World bank tells Nigeria to reduce borrowing

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World bank tells Nigeria to reduce borrowing

The World Bank

World bank tells Nigeria to reduce borrowing. The World Bank Group has advised Nigeria to reduce its borrowing from the Central Bank in order to reduce the country’s inflationary pressures.

Alex Sienaert, the World Bank’s Lead Economist for Nigeria, revealed this on Thursday during an economic assessment session at the Lagos Business School.

In his keynote address, Sienaert praised the administration for recent economic reforms, but cautioned that these reforms must be continued for the economy to recover from current shocks and achieve significant growth in the near future.

“The entire agenda of combating inflation is obviously a massive one,” he remarked. The World Bank – Reduced CBN lending to medium and large enterprises and government borrowing from CBN are two ideas.

“All of these things increase the money supply, which can be reduced to help with inflation, and then replacing imports with FX restrictions with tariffs.”

According to him, the fact that the price of gasoline had drastically increased put a strain on the economy.

He went on to say that a number of solutions would have to be found in order to raise more income so that expenditure could be expanded to address the country’s true priorities.

He also added that the Federal Government’s plan to distribute N8,000 as palliatives following the termination of fuel subsidies will improve the available earnings and income of approximately 50% of Nigerians by 10%.

According to Seinart, many Nigerians would benefit from the extra income from the government since it would prevent them from skipping a meal, pulling a child out of school, or not going to the hospital.

He said, “The other thing we often hear is that N5,000 or N8,000 is a trivial amount of money. I think people will be shocked to know that for a huge number of Nigerian households, it is a very significant amount of money.

“I believe the statistics are that about 50 per cent of Nigerian households are on less than N60,000 a month. So, if you are giving them N5,000 or N8,000 extra for six months to help tie them over, you are increasing their earnings and available incomes on the order of 10 per cent. For many households, it would be meaningful.”

Seinart explained that the amount the government would spend on the cash transfer was not an enormous amount of money when compared to what it will gain from subsidy removal.

“I know what has been in the news is the idea of a N5,000 or N8,000 cash transfer to needy households for about six months, and if you look at the cost of that, it would be equivalent to just about one month’s worth of spending on the subsidy that was happening before it was cancelled under the old exchange rates, and still less than two months’ worth under the new one,” he said.

“So, it is not an enormous amount of resources in comparison to what is being freed up, and it may simply help many poor and vulnerable households get through this without having to do things that harm their prospects, such as pull a school out of school or not go to the hospital.”

President Bola Tinubu recently revealed that the Federal Government planned to transfer N8,000 to 12 million impoverished households over a six-month period to mitigate the impact of the elimination of fuel subsidies.

The plan was opposed by organized labor and several economists. According to Mrs Funmi Sessi, Chairman of the Nigeria Labour Congress, Lagos Chapter, the money will not benefit the typical Nigerian.


She said, “Looking at the money and the effect of the subsidy removal that has escalated the prices of everything in the market, I wonder what the N8,000 can do for a family in a month.

“I wonder what it can buy and what services it can provide for 30 days; N8,000 cannot feed a family for a week; it is not possible; it is a drop in the ocean.”

The federal government has since reversed its intentions and stated that it is studying them.

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