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Ukraine war, COVID-19, inflation; pushing global growth rates lower, poverty rates higher—Malpass

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4 years ago

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World Bank President David Malpass has said “I’m deeply concerned about developing countries. They’re facing sudden price increases for energy, fertiliser, and food, and the likelihood of interest rate increases. Each one hits them hard”. He said this in a curtain raiser speech delivered at the opening of the International Monetary Fund and World Bank Group Spring Meetings in Washington. According to him “these, plus the war in Ukraine and China’s COVID-related shutdowns, are pushing global growth rates even lower and poverty rates higher. We’ve 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’re facing reduced commercial activity and trade. Also, the debt crises and currency depreciations have a burden that falls heavily on the poor. Many discussions this week will focus on these topics.  

“For Ukraine, we’ve mobilized nearly $1 billion in emergency financing, and we’ve announced another $1.5 billion to support essential government services. I made that announcement in Poland last week. I want to spend a few minutes on the issue of food insecurity. I was recently at the World Water Forum in Senegal, and then I visited Morocco. Both countries are being affected by the price spike in the energy and fertiliser that are used to make food. This is an intense problem. Food crises are bad for everyone, but they’re devastating for the poorest and most vulnerable. There are two reasons. First, the world’s poorest countries tend to be food importing countries. Second, food accounts for at least half of total expenditures in household budgets in low-income countries, so it hits them hardest. I joined Kristalina (Georgieva, IMF Managing Director), Ngozi (Okonjo-Iweala, WTO Director-General), and David Beasley (UN World Food Program Executive Director) in a joint statement last week on food insecurity. We wanted to highlight the issue and help coordination. Countries must be taking action now to encourage the production of food, energy, and fertiliser. The production chain needs all three. It’s vital for countries, both advanced and developing, to reduce their trade barriers.  

“Global trade is still facing quotas, high import tariffs, high export tariffs, expensive food price subsidies, and even export bans on food products. These should stop. The international community needs to immediately step up emergency assistance for food insecurity and help bolster social safety nets. From the World Bank’s standpoint, we are providing roughly $17 billion per year to strengthen food security – a big part of the global effort. I’ll turn briefly to the COVID-19 response, which is still underway. The World Bank Group expanded our financing rapidly, reaching $157 billion in the 15 months ending June 2021. Vaccines were a big part of this effort. We now expect to have committed $11 billion to purchase and deploy vaccines in our current fiscal year ending June 30, benefiting 81 countries. This has been a massive effort by our country teams around the world and has brought hundreds of millions of shots to arms. Over the next few weeks, I expect to discuss with our board a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023. We expect to commit around $50 billion of this amount in the next three months. This is a continued, massive crisis response given the continuation of the crisis. Helping this effort was the front loading of IDA19. IDA has been a key part of what has been a record scale-up. We’ll be starting IDA20 on July 1, making $93 billion available to IDA countries, the poorest.  

As part of our scale up, we’ve increased our climate financing and technical support to over $26 billion in fiscal 2021 alone. That’s our highest level ever. Electrical grid and base load were key topics in my visits to Poland and Romania last week. I note that Ukraine synchronised its electrical grid with Western Europe in recent weeks, which is a step toward improving the electrical grid for Western Europe. I want to say a few words on debt and inflation. These are two big problems facing global growth. Due to high debt and deficit levels, countries are under severe financial stress. Sixty percent 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; suspension of debt service payments and penalty interest; expanding eligibility; a simple rule so that it can be evaluated and enforced and engaging commercial creditors at the beginning of the process.   We expect the debt crisis to continue to worsen in 2022. 

I want to turn now to the inflation problem, which is causing immense strain. Policies need to be adjusted to enhance supply, not just increasing demand. Markets are forward looking so it’s vital for governments and private sectors to state that supply will increase and that their policies will foster currency stability to bring down inflation and increase growth rates. This is especially important as global supply chains shift away from dependency. Central banks need to use more tools under current policies. The inequality gap has widened materially, with wealth and income concentrating in narrow segments of the global population. Interest rate hikes, if that’s the primary tool, will add to the inequality challenge that the world is facing. Central banks can use more of their tools, not just interest rates. Capital is being misallocated now. One of the focal points should be using all the central bank tools so that capital is allocated in a way that helps increase supply. That will be an effective way to address inflation. Some of the tools include: changing the duration of their portfolio; it would be very helpful to shorten it; encouraging supply through their regulatory policies; providing forward guidance that fosters currency stability and other tools as well to powerfully address the inflation problem.  

“One final point and then I’ll see if there are questions. I recently attended major meetings on fragility in Brussels and at the Munich Security Conference. In addition to the high priority that’s needed for energy and food production, we must have a global effort to strengthen security and stability. This involves a commitment to security and peace. It involves constant efforts to strengthen institutions to improve their coordination, and to raise living standards.  I wanted to end on that because as I’ve traveled a lot recently. This issue of fragility is a major risk within the developing world. 

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Economy

Nigeria champions African-Arab trade to boost agribusiness, industrial growth

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3 days ago

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December 5, 2025

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The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.

The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.

The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.

He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.

“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”

Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”

The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.

With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.

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Economy

FEC approves 2026–2028 MTEF, projects N34.33trn revenue 

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3 days ago

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December 4, 2025

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Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.

The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.

He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.

Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.

The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.

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Economy

CBN hikes interest on treasury Bills above inflation rate

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3 days ago

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December 4, 2025

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The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%. 

The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.

Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.

The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.

Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.

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