Market News

World Bank yesterday advised the Federal Government to urgently cut import tariffs and remove ban on some import items to reduce rise in prices of goods and services.

According to the World Bank Country Director for Nigeria, Mathew Verghis, the measures, if applied, will reduce poverty rate.

Verghis, who spoke on a cable television monitored in Lagos, noted that high inflation erodes the purchasing power of millions of Nigerians.

In its Consumer Price Index (CPI) Report for October, the National Bureau of Statistics (NBS) put the inflation rate at 16.05 per cent down from the September figure of 18.02.

According to the NBS, it was the seventh consecutive month of decline and the lowest in three years.

The Report was released on November 17.

But Verghis said the bank’s projections show poverty levels in Nigeria may continue to increase through 2025 and possibly into 2026 if inflation is not decisively addressed.

“The reason we are projecting poverty to continue to rise in 2025, and possibly into 2026, is because inflation remains high enough that it is undermining household incomes, especially for the poor, because food inflation remains at around 20 per cent,” the World Bank director said.

Advising Nigeria to sustain ongoing economic reforms, Verghis said that India and China and other countries achieved stability through decades of consistent reform.

He said: “Nigeria has high tariffs and, in some cases, import bans on goods consumed by the poor… One way of lowering inflation quickly is to reduce some of these tariffs and take away some of these import bans.”

Speaking on the naira, Verghis said that raising export earnings represent a viable way to keep the naira stable.

He said: “The best way to keep the Naira stable is to make sure that your exports are increasing and your foreign direct investment is increasing.

“The primary objective is to get growth going, and a stable exchange rate that allows businesses to plan will contribute to that.”

The director also praised progress in revenue diversification. “Nigeria is now, today, much less dependent on oil revenues than it was before,” he said and attributed it to a more realistic exchange rate and the removal of petrol subsidies.

Verghis argued that higher non-oil revenues will allow greater investment in infrastructure and human capital.

He said that Nigeria’s borrowing outlook is improving as seen in the reasonably moderate debt-to-GDP ratio but cautioned that borrowed funds should be spent wisely.