The World Bank on Tuesday proffered steps developing countries and the international community can take to speed up recovery after COVID-19 and blunt long-term adverse effects of the pandemic, including securing core public services, getting money directly to people and maintaining the private sector. These, the bank said, would limit the harm and help prepare for recovery.
In a report titled ‘Countries Can Take Steps Now to Rebuild from COVID-19′, the World Bank said short-term response measures to address the health emergency and secure core public services would 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, the World Bank said many countries would 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 this year, and the number could rise further.
Analysts say the World Bank’s projection is not surprising, adding, however, that Nigeria can avert the impending doom if it responds appropriately.
Taiwo Oyedele, head of tax at PwC, said the World Bank’s projection of 60 million people being pushed into extreme poverty as a result of COVID-19 is not surprising given the attendant economic crisis.
He said besides the number of people already living in poverty, tens of millions more live on the edge of the poverty line and would easily be thrown into poverty with the slightest economic dislocation.
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.
Ayodele Akinwunmi, relationship manager, investment banking at FSDH Merchant Bank Limited, said government can implement appropriate policies that encourage private investment to avert the situation.
According to analytical chapters released Tuesday from the World Bank Group’s Global Economic Prospects report, the coronavirus pandemic and the economic shutdowns are dealing a severe blow to the global economy and especially poorer countries.
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.
Uche Uwaleke, professor of finance and capital markets and chair, Banking and Finance Department, Nasarawa State University, Keffi, said it should be expected that if the economy contracts by as much as 3.4 percent this year according to IMF projection, then a lot more Nigerians would 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 interstate travel since domestic flights are now scheduled to commence in a few weeks’ time,” Uwaleke said.
“The massive borrowing contained in the 2020 budget should strictly be applied to capital projects in critical sectors. The plan to borrow about $1.2 billion for mechanised 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,” he said.
Buttressing the economic impact of COVID-19 across the globe, David Malpass, World Bank Group president, said the scope and speed with which the 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 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,” he said.
