World Bank on Tuesday profiled steps developing countries and the international community can take now to speed recovery after the worst of the health crisis has passed and blunt long-term adverse effects.
Such steps include securing core public services, getting money directly to people and maintaining the private sector. These will limit the harm and help prepare for recovery.
The World Bank said short-term response measures to address the health emergency and secure core public services will need to be accompanied by comprehensive policies to boost long-term growth, including by improving governance and business environments, and expanding and improving the results of investment in education and public health. To make future economies more resilient, many countries will need systems that can build and retain more human and physical capital during the recovery – using policies that reflect and encourage the post-pandemic need for new types of jobs, businesses and governance systems.
The global Bank estimated 60 million people across the globe could be pushed into extreme poverty in 2020, saying it would rise further.
World Bank stated this on Tuesday in a report titled ‘Countries Can Take Steps Now to Rebuild from COVID-19′.
On how Nigeria can respond to this, Ayodele is, relationship manager, investment banking at FSDH Merchant Bank Limited said Government can implement appropriate policies that encourage private investment to avert the situation.
The coronavirus (COVID-19) pandemic and the economic shutdowns are dealing a severe blow to the global economy and especially poorer countries according to analytical chapters released Tuesday from the World Bank Group’s Global Economic Prospects report.
Beside the number of people already living in poverty, tens of millions more live on the edge of the poverty line and will easily be thrown into poverty with the slightest economic dislocation, said Taiwo Oyedele, head of tax PwC.
He said the World Bank’s projection of 60m people being pushed into extreme poverty as a result of Covid-19 is therefore not surprising given the attendant economic crisis.
The analysis has been released ahead of the June 8 issuance of the full report, which will include the Bank Group’s latest forecasts for the global economy.
To prevent this, Oyedele said there needs to be a concerted effort to stimulate the economy to protect livelihoods particularly for Micro Small and Medium (MSMEs) who support the vast majority of households.
“The scope and speed with which the COVID-19 pandemic and economic shutdowns have devastated the poor around the world are unprecedented in modern times. Current estimates show that 60 million people could be pushed into extreme poverty in 2020. These estimates are likely to rise further, with the reopening of advanced economies the primary determinant,” said World Bank Group President David Malpass. “Policy choices made today – including greater debt transparency to invite new investment, faster advances in digital connectivity, and a major expansion of cash safety nets for the poor – will help limit the damage and build a stronger recovery. The financing and building of productive infrastructure are among the hardest-to-solve development challenges in the post-pandemic recovery. We need to see measures to speed litigation and the resolution of bankruptcies and reform the costly subsidies, monopolies and protected state-owned enterprises that have slowed development.”
Uche Uwaleke, Professor of finance and capital markets, chair, banking and finance department, Nasarawa State University Keffi, Nasarawa State, said it should be expected that if the economy contracts by as much as 3.4% as the IMF had projected this year, then a lot more Nigerians will be thrown into extreme poverty.
In order to avert this catastrophe, he said the government should ensure that the stimulus packages are well targeted especially to support micro and small businesses. The gradual reopening of the economy will go a long way to stimulate economic activities in view of the huge population in the informal sector. This should include relaxation of inter-state travel since domestic flights are now scheduled to commence in a few weeks’ time. The massive borrowing contained in the 2020 budget should strictly be applied to capital projects in critical sectors. The plan to borrow about $1.2billion for mechanized Agriculture in over 600 local government areas in the country is laudable as it is capable of creating thousands of job opportunities if well implemented, Uwaleke said.
