The World Bank Group President, David Malpass has said that Nigeria and other developing countries are faced with sudden price increases for energy, fertilizer and food, as well as interest rate increases due to war in Ukraine and Covid-19 related shutdown.
This is as the international financial institution has expressed concern over higher poverty rates and even lower growth rates in these developing countries.
This was made known by Malpass while making his opening remark at the World Bank Spring meetings 2022 media roundtable, according to a statement by the World Bank.
What the President of World Bank Group is saying
Malpass was quoted as saying, “I am deeply concerned about developing countries. They are facing sudden price increases for energy, fertiliser, and food, and the likelihood of interest rate increases. Each one hits them hard.
“These plus the war in Ukraine and China’s COVID-related shutdowns, are pushing global growth rates even lower and poverty rates higher.
“We have lowered our 2022 growth rate to 3.2 per cent from 4.1 per cent before. People are facing reversals in development for education, health and gender equality.
“They are facing reduced commercial activity and trade. Also, the debt crises and currency depreciations have a burden that falls heavily on the poor.’’
Global debt crisis to worsen in 2022
- While the World Bank boss noted that many discussions at this week’s meeting would focus on these challenging topics, he said that the bank expected the debt crisis to continue to worsen in 2022.
- Malpass said debt and inflation are 2 big problems facing global growth, adding that countries are under severe financial stress due to high debt and deficit levels.
- He said, “About 60 per cent of low-income countries are already in debt distress or at high risk of it.
- “I participated virtually in our April 13 conference on debt transparency and sustainability and suggested steps to improve the implementation of the Common Framework.
- “These included establishing a timeline for forming creditors’ committees and suspension of debt service payments and penalty interest.
- “Others are expanding eligibility: a simple rule so that it can be evaluated and enforced and engaging commercial creditors at the beginning of the process.’’
What you should know
- The ongoing war between Russia and Ukraine has set off a chain reaction in the global economy which has negatively been impacting even developed countries.
- The World Bank had earlier urged advanced countries to keep markets open, remove trade barriers and reverse policies that concentrate wealth in the face of high energy and food prices, increasing debt concerns and potentially worsening poverty and hunger.
- Ukraine is a key source of grain while Russia is a major producer of energy and fertilizer needed for agriculture, and the war is creating sudden shortages of energy, fertilizer, and food.