Ndubuisi Francis in Abuja
The President of the World Bank Group, David Malpass has lamented the impact of rising food and energy costs across the world, urging Nigeria and other developing countries to adjust policies to boost supply.
Higher food prices pushed inflation in Nigeria to 15.92 per cent in March, the highest in five months
In an address he presented at the ongoing 2022 IMF/World Bank Spring Meetings which opened in Washington DC, United States of America yesterday, Malpass said he was deeply concerned about developing countries, adding that they were facing sudden price increases for energy, fertiliser, and food, and the likelihood of interest rate increases.
These, plus the war in Ukraine and China’s COVID-related shutdowns, are pushing global growth rates even lower and poverty rates higher, he stated.
Malpass observed that inflation was causing immense strain globally, especially among poor nations.
He said: “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 fertilizer. The production chain needs all three. It’s vital for countries, both advanced and developing, to reduce their trade barriers.
“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.”
He called on central banks to use more tools under current policies, adding that the inequality gap had widened materially, with wealth and income concentrating in narrow segments of the global population.
According to him, “interest rate hikes, if that’s the primary tool, will add to the inequality challenge that the world is facing.”
Malpass recalled that the World Bank had lowered the 2022 growth rate to 3.2 per cent from 4.1 percent before, adding that people were facing reversals in development for education, health, and gender equality, as well as reduced commercial activity and trade.
“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,” he said.
