A new report by the World Bank yesterday declared that the COVID-19 has continued to threaten food security in Nigeria, saying households and firms were yet to recover from the devastating impact of the pandemic.
The bank therefore called on governments at all levels to adopt urgent policy actions to curb the long-run impacts of the pandemic on the lives and livelihoods in the country.
The report titled ‘COVID-19 in Nigeria: Frontline Data and Pathways for Policy’, stated that the pandemic had inflicted health and economic shocks on countries whose effects would be felt far into the future.
Also, in a separate report on its latest ‘Migration and Development Brief,’ released yesterday, the World Bank estimated that remittances to Nigeria and other low and middle income countries may increase by 7.3 per cent to $589 billion in 2021.
Continuing, on the effects of COVID-19, the multilateral institution noted that in countries such as Nigeria, the pandemic has continued to affect health outcomes, human-capital accumulation, household poverty and coping strategies, as well as labour-market dynamics.
The report showed both the extent of such impacts on Nigerians and promising policy options that could accelerate the nation’s recovery.
It also drew on innovative sources of high-frequency data, including the Nigeria COVID-19 National Longitudinal Phone Survey (NLPS), to inform the choices that Nigerian leaders now face.
“The COVID-19 crisis has provided a wake-up call to address the long-standing structural challenges that could constrain the government’s ambition to lift 100 million Nigerians out of poverty,” World Bank Country Director for Nigeria, Shubham Chaudhuri said.
“There is no time like the present for the country to prepare for future climate and conflict shocks and seize the promise of its young population to lay strong foundations for inclusive growth.
“While many schools have reopened across Nigeria, learning that was lost during the COVID-19 crisis still needs to be recouped and some children have not returned to school.
“Even though many Nigerians have returned to work, the jobs to which they have shifted – mainly in small-scale non-farm enterprises – may not offer income security, making it difficult for households to escape poverty.
“With the COVID-19 crisis ushering in associated shocks – especially to food prices – and social protection remaining rare, households’ food security and their welfare at large is under serious threat,” it added.
The findings underscored the urgency of far-reaching reforms to strengthen Nigeria’s economy and development outcomes.
Commenting on the report, Chaudhuri added: “The COVID-19 crisis has provided a wake-up call to address the long-standing structural challenges that could constrain the government’s ambition to lift 100 million Nigerians out of poverty.
“There is no time like the present for the country to prepare for future climate and conflict shocks and seize the promise of its young population to lay strong foundations for inclusive growth.”
The report suggested rolling out vaccines quickly and equitably to reduce the direct health threat posed by the virus.
It added that it would be essential to help children remediate the learning losses incurred during the pandemic – by getting them back to school or by finding low-tech remote solutions that work for the poor; as well as an expansion of the social protection which could provide short-term relief for the welfare losses currently faced by Nigerian households.
Meanwhile, the bank’s Migration and Development Brief revealed that growth in remittances beat earlier forecast and was an evidence of the resilience of flows in 2020, when remittances declined by only 1.7 per cent despite severe global recession due to the COVID-19 pandemic.
According to the remittances report, for a second consecutive year, capital flows to developing countries (excluding China) are expected to surpass the sum of foreign direct investment (FDI) and overseas development assistance (ODA).
The development reflected the importance of remittances in providing a critical lifeline by supporting household spending on essential items including food, health, and education during periods of economic hardship in migrants’ countries of origin, the bank added.
Remittance inflows to Sub-Saharan Africa returned to growth in 2021, increasing by 6.2 per cent to $45 billion.
Nigeria, the region’s largest recipient, is experiencing a moderate rebound in remittance flows, in part due to the increasing influence of policies intended to channel inflows through the banking system.
The report, however, tipped the Gambia 33.8 per cent, Lesotho 23.5 per cent, Cabo Verde 15.6 per cent and Comoros 12.3 per cent as countries where the value of remittance inflows as a share of Gross Domestic Product (GDP) was significant.
It further stated that in 2022, remittance inflows were projected to grow by 5.5 per cent due to continued economic recovery in Europe and the United States.
World Bank Global Director for Social Protection and Jobs, Michal Rutkowski said: “Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the COVID-19 crisis.
“Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic.”
In terms of remittance costs, the report observed that costs averaged 8 per cent in the first quarter of 2021, down from 8.9 per cent in 2020.
It added that although intra-regional migration makes up more than 70 per cent of cross-border migration, costs are high due to small quantities of formal flows and utilisation of black-market exchange rates.
The report stated that factors contributing to the strong growth in remittance were migrants’ determination to support their families in times of need, aided by economic recovery in Europe and the United States which in turn was supported by the fiscal stimulus and employment support programmes.
It stated that remittances registered strong growth in most regions as flows increased by 21.6 per cent in Latin America and the Caribbean, 9.7 per cent in Middle East and North Africa, 8 per cent in South Asia, 6.2 per cent in Sub-Saharan Africa, and 5.3 per cent in Europe and Central Asia.
In East Asia and the Pacific, remittances fell by 4 per cent – though excluding China, remittances registered a gain of 1.4 per cent in the region.
In Latin America and the Caribbean, growth was exceptionally strong due to economic recovery in the United States and additional factors, including migrants’ responses to natural disasters in their countries of origin and remittances sent from home countries to migrants in transit.
However, according to the World Bank’s Remittance Prices Worldwide Database, cost of sending $200 across international borders continued to be too high, averaging 6.4 per cent of the amount transferred in the first quarter of 2021.
This is more than double the Sustainable Development Goal (SDG) target of 3 per cent by 2030.
It stated that,” It is most expensive to send money to Sub-Saharan Africa (8 per cent) and lowest in South Asia (4.6 per cent). Data reveal that costs tend to be higher when remittances are sent through banks than through digital channels or through money transmitters offering cash-to-cash services.”
Lead Author of the Brief and Head of KNOMAD, Dilip Ratha, said, “The immediate impact of the crisis on remittance flows was very deep. The surprising pace of recovery is welcome news. To keep remittances flowing, especially through digital channels, providing access to bank accounts for migrants and remittance service providers remains a key requirement.
“Policy responses also must continue to be inclusive of migrants especially in the areas of access to vaccines and protection from underpayment.”