World Bank experts said Nigeria and 73 other countries eligible to borrow from the World Bank’s International Development Association are yet to see a global recovery.
The statement was made by World Bank Group Vice President for Equitable Growth, Finance and Institutions, Indermit Gill, and Vice President for Development Finance, Akihiko Nishio, in a report posted on the bank’s blog on Thursday.
The report was entitled “The global upswing is passing the poorest countries”.
According to the report, the world is experiencing an economic recovery from the devastating effects of the COVID-19 pandemic, which is believed to be the strongest post-recession recovery in 80 years.
It said: “The world economy is booming – or so it seems. Global growth is picking up again just a year after COVID-19 triggered the deepest recession since World War II. This year is likely to be the strongest post-recession recovery in 80 years, with global GDP expected to grow by 5.6 percent.
“Growth in advanced economies is projected to reach 5.4 percent – the highest rate in nearly 50 years – fueled by rapid vaccinations and unprecedented fiscal and monetary support since the pandemic began. Almost all advanced economies will return to their pre-pandemic per capita income in 2022. ”
According to experts, in some parts of the world the damage caused by the pandemic is apparently being repaired quickly.
They said, “Not so in the 74 countries that are eligible for loans from the World Bank’s International Development Association. These are the poorest in the world: they make up about half of all people who live on less than $ 1.90 a day.
“For them, the global ‘recovery’ is simply nowhere to be seen. In 2021, growth will be the slowest in more than two decades (excluding 2020), undoing years of progress in fighting poverty. For them, the damage is not repaired quickly. In 2030, every fourth person will still live below the international poverty line here. ”
The experts said countries need additional help to catch up, adding that certain things need to be done to ensure they recover from the recession.
They said, “These countries will need significant help to get out of the COVID-19 recession. To return to the path of convergence with wealthier economies, IDA countries will need up to $ 376 billion in additional funding by 2025 – beyond the regular external funding needs of $ 429 billion.
“Many of these countries are already heavily indebted, so borrowing options are limited. Given the fiscal constraints of most countries in the wake of the pandemic, foreign aid is likely to remain unchanged or even decline. In these circumstances, IDA countries will increasingly need assistance in the form of grants or interest-free loans.
“This will be a critical phase – to wipe out COVID-19 for good and also to put the poorest economies on the right track to cope with the profound development challenges they face in the long term.
“A first step will be to speed up the delivery of vaccines: nations with overdoses should distribute them to the poorest countries, and vaccine manufacturers should prioritize available doses for countries that need them most.
“The next step is to launch an ambitious package of policy reforms – to facilitate the transition of labor and capital to high-growth sectors, lower trade costs and encourage green investment – leading to a green, resilient and inclusive recovery . ”