Nigeria spends just $220 per Nigerian per year, which is 12% of GDP: World Bank

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The World Bank has said that the Nigerian government spends just $220 per Nigerian per year, and at just 12% of GDP, this is one of the lowest spending levels in the world.

The World Bank revealed this in a report on Monday for its Nigeria Finance Review for the period. They said Nigeria needs to increase spending to boost economic development.

The World Bank noted that to promote economic development, Nigeria needs to increase spending from its current very low levels.

  • The bank said:Despite its great development needs, Nigeria spends just $220 per Nigerian per year, and at just 12% of GDP, this is one of the lowest spending levels in the world..
  • “Unfortunately, low public spending translates into poor development results. The country is among the eight economies with the lowest human capital in the world, ranking 167 out of 174 countries in the World Bank’s Human Capital Index.
  • “As a result, a child born in Nigeria today will only be 36% as productive when they grow up as they would be if they had access to effective education and health services.
  • “In addition, the infrastructure needs also remain extremely high. To provide all the infrastructure the economy needs to maximize its potential, the country would need to invest $3 trillion by 2050.”

Investment in the social sector: The bank added that Nigeria not only spends little, but the social sectors receive very little, less than a quarter of the national budget allocation.

They added that compared to similar countries, Nigeria’s spending in the social sectors (education, health and social protection) is very low, citing that in 2021, and at a time when the country was fighting the COVID-19 pandemic. 19, the average Nigerian received around $15 in public health services a year, compared to $55 per person in Indonesia.

  • “Low social spending limits the quantity and undermines the quality of health and education services Nigerians can expect to receive. In turn, this reduces their chances of becoming productive workers and limits private investment outside of the oil sector.”

They affirmed that the key to increase public spending is urgently raising more revenue.

  • “At 7% of GDP in 2021, Nigeria’s income to GDP ratio is among the five lowest in the world. To increase revenue, the government has initiated major reforms to increase revenue in the past two years.
  • “Some of these measures include increasing VAT rates (from 5 to 7.5% in 2020), starting the process of limiting tax expenditures in certain sectors (2021), putting into operation the Tax on electronic money transfers and introducing special taxes on certain “sins”. “goods (2022)” they added.

They revealed the key challenges that continue to undermine Nigeria’s ability to raise more revenue: low tax rates, inefficiencies in tax administration, high tax expenditures, low tax morale, and the opaque and complex governance of the oil sector.

You can remember: Nigeria’s projected GDP growth for 2022 has been reduced by the International Monetary Fund (IMF) from 3.4% to 3% due to weak Nigerian oil production and the heavy impact of flooding.

In the statement, the IMF also projected a massive economic slowdown for the country, causing GDP growth to slow to 3%. Part of the statement said:

  • “Output growth of 3.4% (y/y) in the second quarter of 2022 marked the seventh consecutive quarter of growth driven by various service sectors, especially information technology, trade and finance.”

Reason for slowdown:According to the multilateral lender, Nigeria’s oil production has been declining since mid-2020 due to low investment and significant leaks caused by poor maintenance and theft.

… Nigeria spends just $220 per Nigerian per year, which is 12% of GDP: World Bank Read more at … Naijaonpoint.

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