Publication: Nigeria Development Update, June 2021: Resilience through Reforms
Loading...
Published
2021-06
ISSN
Date
2021-06-21
Author(s)
Editor(s)
Abstract
In 2020, Nigeria experienced its deepest recession in four decades, but growth resumed in the fourth quarter as pandemic restrictions were eased, oil prices recovered, and the authorities implemented policies to counter the economic shock. As a result, in 2020 the Nigerian economy experienced a smaller contraction (-1.8 percent) than had been projected when the pandemic began (-3.2 percent). As part of its response, the government carried out several long-delayed policy reforms, often against vocal opposition. Notably, the government (1) began to harmonize exchange rates; (2) began to eliminate gasoline subsidies; (3) started adjusting electricity tariffs to more cost-reflective levels; (4) cut nonessential spending and redirected resources to COVID-19 (coronavirus) responses at both the federal and the state levels; and (5) enhanced debt management and increased public-sector transparency, especially for oil and gas operations. By creating additional fiscal space and maximizing the impact of the government’s limited resources, these measures were critical in protecting the economy against a much deeper recession and in laying the foundation for earlier recovery. However, several critical reforms are as yet incomplete, which threatens Nigeria’s nascent recovery. In the baseline scenario, Nigeria’s economy is expected to grow by 1.8 percent in 2021. Despite the current favorable external environment, with oil prices recovering and growth in advanced economies, reform slippages would hinder the renewed economic expansion and undermine progress toward Nigeria’s development goals. In a risk scenario, in which the government fails to sustain recent macroeconomic and structural reforms, the pace of economic recovery would slow, and GDP growth couldbe just 1.1 percent in 2021.
Link to Data Set
Citation
“World Bank. 2021. Nigeria Development Update, June 2021: Resilience through Reforms. © World Bank. http://hdl.handle.net/10986/35786 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Nigeria Development Update, June 2020(World Bank, Washington, DC, 2020-06)This edition of the Nigeria Development Update provides policy options that Nigerian policymakers may consider in order to mitigate the impacts of COVID-19 (coronavirus) and lay the foundation for a strong recovery. These policy options are organized in the five areas: 1. Containing the COVID-19 outbreak and preparing to deal with a more severe outbreak; 2. Enhancing macroeconomic management to boost investor confidence; 3. Safeguarding and mobilizing revenues; 4. Reprioritizing public spending to protect critical development expenditures; 5. Supporting economic activity and provide relief for poor and vulnerable communities.Publication Zimbabwe Economic Update, June 2021(World Bank, Washington, DC, 2021-06)This third edition of the Zimbabwe Economic Update (ZEU) aims to provide both a current and historical background covering the pre-pandemic (2019) and pandemic (2020 to April 2021) period. The 2019-2020 period marked a very difficult time for the country as 2019 was clouded by a prolonged drought, unprecedented cyclone and turbulent economic reform period; while 2020 and early 2021 coincided with a global Coronavirus pandemic that further dampened prospects at both global and local levels.Publication Kenya Economic Update, June 2021(World Bank, Washington, DC, 2021-06-28)The pandemic has dealt a major blow to the economy, but the government’s quick policy responses have helped to cushion the impact, and a partial recovery is underway. In response to the improving conditions, many of the tax and regulatory relief measures extended at the onset of the crisis have been discontinued. The economy is expected to continue to recover and gradually return to growth of above 5 percent. The near-term economic outlook for Kenya, as elsewhere, remains unusually uncertain and contingent on the course of the pandemic.Publication Maldives Development Update, April 2021(World Bank, Washington, DC, 2021-04)The Coronavirus (COVID-19) pandemic brought global tourism and travel to a standstill. Thus, although the health impact of the pandemic has been fairly contained in Maldives, its economic consequences have been devastating. To contain the spread of the virus, the country closed its borders for the first time in history, between March 27 and July 15, 2020, leading to a sudden stop in tourism, the main driver of growth, jobs, and revenues. The special focus article of the April 2021 Maldives Development Update explores how Maldives can leverage digital technologies to build back better for green, resilient, and inclusive development in the post-COVID world. It identifies the main bottlenecks to greater digital adoption and provides preliminary recommendations on how the government can address them.Publication Afghanistan Development Update, April 2021(World Bank, Washington, DC, 2021-04-05)Afghanistan continues to face daunting challenges and uncertainties. The Coronavirus (COVID-19) crisis imposed a heavy burden on the economy, public finances, and private sector investment in 2020. Urban unemployment and hardship increased, while declining revenues limited the feasible extent of the government’s response. With many firms closed and jobs lost, recovery from the impacts of the crisis now depends on re-investment and a recovery in confidence. Restoration of confidence has been hampered, however, by challenging political and security conditions, and uncertainties regarding future international support. Peace talks between the government and the Taliban are making slow progress, while the frequency of Taliban attacks has increased. Economic recovery will depend on a continued strong partnership between the government and its international partners. To help restore private sector confidence and facilitate continued international support, the government needs to demonstrate substantial progress on revenue, anti-corruption, and private sector reforms.
Users also downloaded
Showing related downloaded files
Publication Fiscal Incidence Analysis for Kenya(World Bank, Washington, DC, 2018-06-29)Kenya has made satisfactory progress in reducing poverty and inequality in recent years. Economic growth in Kenya between 2005-06 and 2015-16 averaged around 5.3 percent, exceeding the average growth of 4.9 percent observed for Sub-Saharan Africa. This robust economic growth resulted in a reduction in poverty, whether measured by the national or international poverty line. The proportion of the population living beneath the national poverty line fell from 46.8 percent in 2005-06 to 36.1 percent in 2015-16, showing a modest improvement in the living standards of the Kenyan population. Similarly, poverty under the international poverty line of US$ 1.90 a day declined from 43.6 percent in 2005-06 to 35.6 percent in 2015-16. At this level, poverty in Kenya is below the average in sub-Saharan Africa and is amongst the lowest in the East African Community (World Bank, 2018b). However, the proportion of the population living in poverty remains comparatively high in Kenya and the rate at which growth translated into poverty reduction was lower than elsewhere. At twice the average, Kenya’s poverty rate is still high for a lower-middle income country, a group that Kenya joined only in 2015. In addition, the Kenya’s growth elasticity of poverty reduction, the percentage reduction in the poverty rate associated with a one-percent increase in mean per capita income is only 0.57, lower than in Tanzania, Ghana, or Uganda (World Bank, 2018b). This leads to the obvious question of what can be done to make economic growth more pro-poor in Kenya. This study assesses the distributional consequences of Kenya’s system of taxes and transfers, covering 60 percent of revenue and between 25 and 30 percent of government spending. The analysis of fiscal incidence and distributional consequences of Kenya’s tax and transfer system is an important input for designing pro-poor policies and potentially for influencing the rate at which economic growth translates into poverty reduction. In this study, direct taxes and transfers, indirect taxes (VAT and excise duties), as well as public health and education spending are assessed in terms of their distributional impacts. Overall, these taxes and transfers account for about 60 percent of revenue and between 25 and 30 percent of government spending.Publication Ten Steps to a Results-Based Monitoring and Evaluation System : A Handbook for Development Practitioners(Washington, DC: World Bank, 2004)An effective state is essential to achieving socio-economic and sustainable development. With the advent of globalization, there are growing pressures on governments and organizations around the world to be more responsive to the demands of internal and external stakeholders for good governance, accountability and transparency, greater development effectiveness, and delivery of tangible results. Governments, parliaments, citizens, the private sector, Non-governmental Organizations (NGOs), civil society, international organizations, and donors are among the stakeholders interested in better performance. As demands for greater accountability and real results have increased, there is an attendant need for enhanced results-based monitoring and evaluation of policies, programs, and projects. This handbook provides a comprehensive ten-step model that will help guide development practitioners through the process of designing and building a results-based monitoring and evaluation system. These steps begin with a 'readiness assessment' and take the practitioner through the design, management, and importantly, the sustainability of such systems. The handbook describes each step in detail, the tasks needed to complete each one, and the tools available to help along the way.Publication Making Devolution Work for Service Delivery in Kenya(Washington, DC: World Bank, 2022-02)Kenya adopted a new constitution and began the process of devolution in 2010, ceding many formerly national responsibilities to new county governments. As an institutional response to longstanding grievances, this radical restructuring of the Kenyan state had three continuing main objectives: decentralizing political power, public sector functions, and public finances; ensuring a more equitable distribution of resources among regions; and promoting more accountable, participatory, and responsive government at all levels. The first elections under the new constitution were held in 2013 and led to the establishment of 47 new county governments. Each county government is made up of a county executive, headed by an elected governor, and an elected County Assembly that legislates and provides oversight. Making Devolution Work for Service Delivery in Kenya takes stock of how devolution has affected the delivery of basic services to Kenyan citizens nine years after the “devolution train” left the station. Whereas devolution was driven by political reform, the ensuing institutions and systems were expected to deliver greater socioeconomic equity through devolved service delivery. Jointly coordinated by the government of Kenya and the World Bank, the Making Devolution Work for Service Delivery (MDWSD) study is the first major assessment of Kenya’s devolution reform. The study provides key messages about what is working, what is not working, and what could work better to enhance service delivery based on currently available data. It provides an independent assessment of service delivery performance in five sectors: agriculture, education, health, urban services, and water services. This assessment includes an in-depth review of the main pillars of devolved service delivery: accountability, human resource management, intergovernmental finance, politics, and public financial management. In addition to its findings for the present, the MDWSD study provides recommendations on how Kenya can improve its performance in each of these pivotal areas in the future.Publication Managing County Assets and Liabilities in Kenya(Washington, DC : World Bank, 2022)Public entities around the world possess an enormous volume of assets and wealth, which includes land, buildings, historic sites, parks, and infrastructure networks, among many others. Good management of such assets is a catalyst for accelerating development and expanding services; poor asset management generates enormous losses, including lost opportunities to build wealth. Private enterprises increasingly use computerized systems to manage assets such as fleets and buildings. Many city leaders in developing countries, however, are unaware of asset management or feel they lack the time or money to undertake it. Managing County Assets and Liabilities in Kenya: Postdevolution Challenges and Responses can help them begin or maintain their efforts to manage assets sustainably. This book helps readers understand the basic concept of asset management; explains systems, tools, and procedures; and provides models and guidance. Kenya has achieved much since its 2013 devolution of governance and management to new counties. However, counties, which are the local governments in Kenya, are still working toward establishing systems and procedures, creating asset and liability registers, verifying and valuing assets, using assets strategically, and resolving disputes surrounding inherited assets and liabilities. This book provides glimpses into the Kenyan devolution process and asset transfer challenges, draws lessons, and explores options relevant to both Kenya and other nations. Ample studies discuss various aspects of municipal asset management, such as managing infrastructure, fixed assets, water services, building properties, roads, or fleets. This book is unique among asset management studies in three ways: it discusses all sorts of assets and liabilities and their interlinkages, exemplifies the close connection between financial results and asset management of municipalities, and reveals the political economy challenges in transferring assets and liabilities across public entities.Publication Systematic Country Diagnostic(World Bank, Washington, DC, 2020-11)This World Bank Systematic Country Diagnostic (SCD) provides an analytical foundation for identifying country-level actions and investments that would increase growth and boost shared prosperity in Kenya. The conceptual framework adopted for this SCD is organized around two main strategies: (1) higher aggregate output and productivity growth and (2) greater equity and inclusiveness.