Publication: The Economic Impacts of Weather-Related Shocks in Nigeria: A First Step Toward the Quantification of Fiscal Risks
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2025-11-07
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2025-11-19
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The objective of this report is to provide an initial assessment of the economic impacts of weather-related shocks in Nigeria, focusing on three key dimensions: (i) damage to physical assets, (ii) growth impacts, and (iii) household-level impacts. In addition, this study discusses how these economic impacts put pressure on public finances and constitute a considerable source of fiscal risk. Specifically, from a fiscal perspective, the growth effects of weather-related events can be approached as traditional macroeconomic shocks that slow down economic growth and result in lower-than anticipated fiscal revenues. On the other hand, potential damage to assets and well-being impacts constitutes contingent liabilities that can translate into additional public expenditure when weather-related shocks materialize. These effects must therefore become an essential dimension of fiscal policy making and be incorporated into the broader fiscal risk management framework to ensure an adequate budgetary response. This assessment aims to establish a foundation for engaging a policy dialogue with the Federal and State governments on the management of fiscal risks associated with weather-related events. This report is organized as follows: section 1 presents an overview of disaster and weather-related shocks in Nigeria, summarizing historical trends and focusing on the large floods of 2012 and 2022, before briefly discussing key structural characteristics that hamper Nigeria’s capacity to face weather-related events. Section 2 is the core of the report and seeks to provide a comprehensive understanding of the threats that weather-related shocks pose to the country’s macro fiscal position. Section 3 presents a discussion on the historical and future trends of key risk drivers: climate change and urbanization, which may increase weather-related risks in the future. Section 4 outlines policy options aimed at strengthening financial preparedness to be further refined through stakeholder consultations and future policy dialogue.
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“World Bank. 2025. The Economic Impacts of Weather-Related Shocks in Nigeria: A First Step Toward the Quantification of Fiscal Risks. © World Bank. http://hdl.handle.net/10986/44000 License: CC BY-NC 3.0 IGO.”
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