Pandemic to poverty: Nigeria in the post-COVID future

Africa Press-Nigeria:

Oil-rich Nigeria can’t seem to catch a break. From an unemployment rate forecast to rise to 33.5% by 2020, to a global pandemic that could push at least 5 million people into poverty and, a near 14% inflation rate as well as an impending recession, the Nigerian future looks dire in the coming months, according to multiple data and reports from several agencies including the World Bank and the United Nation’s World Food Programme.

Africa’s largest economy has had to review its oil benchmark downward in the 2020 spending plan to $25 per barrel from $57 per barrel, cutting the planned crude production of 2.18 million to 1.94 million barrels per day to meet the current realities, said Zainab Ahmed, the Minister of Finance.

Nigeria’s projected fiscal deficit also jumped to N5.2 trillion or 3.7% of GDP from an initial N2.2 trillion.

Food inflation
Rising inflation in the country of nearly 200 million people means that more Nigerians are unable to afford food, according to data from Nigeria’s data agency.

“More than 37% of households report being exposed to an increase in prices of major food products, while nearly 12% of exposed households report reducing food consumption in order to manage the impact of shocks”, the National Bureau of Statistics (NBS) said in its Nigeria Living Standards Survey published earlier this month.

Food inflation in Nigeria rose to 15.04% in May; the highest rate since March 2018, or in 26 months. That mixed with increasing poverty and lack of food availability risks fuelling protests in Nigeria, as well as other African countries, says Verisk Maplecroft, a global risk and strategic consulting firm based in Bath, United Kingdom. It adds: “rising food costs will fire up Africa unrest.”

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Lagos state has seen food prices rise by up to 50% in some cases. Increasing rice production (up by an average of 1.8 million tonnes from 2017-2018) is still insufficient to feed Africa’s most populous country.”

The majority of people suffering from acute food insecurity in 2019 were in countries affected by conflict, climate change, and economic crises, says WFP. Nigeria was one of the 10 countries that constituted the worst food crises in 2019. The other nine were Yemen, the Democratic Republic of the Congo, Afghanistan, Venezuela, Ethiopia, South Sudan, Syria, Sudan, and Haiti, according to the Global Report on Food Crises.

The World Food Programme already sees COVID-19 doubling the number of people facing food crises unless swift action is taken. Some 265 million people in low and middle-income countries will be in acute food insecurity by the end of 2020, the UN agency said in April.

Recipe for unrest across the continent
Africa’s “hotbeds of protest are set for a torrid year,” says Indigo Ellis, Head of Africa Research, in the firm’s June 2020 Risk Insight report. “A perfect storm of economic issues and discontent with government are gathering on the near horizon in countries across the region, but the catalyst is going to be food… Falling government revenues and lockdown-related restrictions will have a devastating effect on food supplies, resulting in inevitable price rises that populations can ill afford,” she adds.