This paper examines in great detail the impact of the Russia-Ukraine war on the Nigerian economy for the purpose of informing experts and non-experts alongside providing recommendations to the government. Specifically, it evaluates the trade, monetary, fiscal and macroeconomic conditions of the economy since the war began, as well as debt vulnerabilities, whilst discussing the official response so far, and seeking to forge a path for the government and its international partners.

Nigeria’s monetary and fiscal conditions have deteriorated since the war began. As a major oil producer, one could expect that Nigeria would benefit, without nuance, from higher energy prices. This has not been the case: declining oil production at a time when oil prices led to less of an export boost than expected. Moreover, the rise in the global price of food and fertilisers has translated to higher input costs for households and firms. Meanwhile, spending on oil imports and other merchandise imports, as well as various services (for instance, medical payments and tuition fees) are significant enough to have increased the demand for foreign exchange, consuming most of the increase in income associated with being an oil-exporter and causing a depreciation of the naira.

On monetary policy, the CBN’s financing of the government deficit has also created a weakness that has questioned its independence and made the naira increasingly vulnerable to speculation. Put together, tolerating these domestic economic weaknesses has contributed to the depreciation of the naira, which is not completely reflected in the official foreign exchange market. With stagnation in non-oil revenues and continuous increase in public spending, the government has had to increasingly turn to debt to finance its development needs. The IMF classified Nigeria’s debt as sustainable but points out that threats exist over the medium run, due to the high ratio of interest payments to public revenue.

The analysis presented in the paper shows that war will have a positive impact on real income at the macro level. Considering the increase in prices experienced in the first half of 2022, real income at the macro level is expected to increase by 3.6% in 2022 while multi-year simulations find that real income will increase by 3.9% in 2023 and 2024, as Nigeria gains from being a net exporter of fuel and natural gas and loses on the basis that it is a net importer of food commodities such as wheat.

However, the results at the household level are quite different: the ultra-poor households are worst hit by the war – food expenses are taking a higher share of their income. Further analysis shows that all households experience a decline in average real income (welfare gains are negative). But the lowest quintile households suffer the most from higher expenditure, (3.3% relative to 1.4% for the top quintile) while they experience a decline in average real income (-0.4%).

This publication was first published by the Finance for Development Lab. Click to read more here

Tobacco use kills primary and secondary smokers. While 7 million primary smokers die annually from tobacco use, more than 1.2 million non-smokers also die annually from being exposed to second-hand smoke[1]. Tobacco contains many cancer-causing toxins that harm every organ of the body. Smoking tobacco introduces nicotine and other chemicals, including numerous carcinogens, into the lungs, blood and organs, which causes coronary and non-coronary heart diseases; cerebrovascular disease; chronic obstructive pulmonary disease (COPD); pneumonia and cancers[2]. 

Most diseases caused by tobacco smoking cannot be managed by smokers alone. They require treatment by specialized healthcare providers such as a cardiologist, lung specialist, an oncologist and an informal caregiver. Social support from patients’ informal caregivers is indispensable during and after treatment.

The informal caregiver is defined as a care provider that bears the burden of assisting the patient with physical, psychological and emotional support from the time of diagnosis, during the treatment period, and after treatment[3]. While caregiving may impact positively on the patient, it could also impact negatively on the caregiver who endures the physical, psychological, and emotional costs of care. The caregiver burden may lead to anxiety, depression and impaired quality of life. Although evidence on the health and economic burden of primary smokers has been widely documented, only a few attempts have evaluated the ‘caregiver burden’. In the present study, we assessed the types of burden perceived by informal caregivers and the factors associated with the caregiving burden.

Over the years, the Nigerian government has deployed development financing initiatives to boost food production through increased access to finance for farmers and other small businesses in the sector. While progress may have been made in some areas, the country is still at a critical juncture, as access to food and its affordability remain a major problem for a large part of the population. This brief aims to examine how the government’s financing policies to improve food production have fared, given the prevailing economic conditions in the country. The focus is particularly on such financing programmes as administered by the Central Bank of Nigeria (CBN). It will highlight progress with these financing programmes and discuss other challenges to food production, which are possible drivers of the rising food inflation in the country.

The debt situation in many low-income countries (LICs) following the COVID-19 pandemic has deteriorated considerably. While many LICs had participated in the G20’s Debt Service Suspension Initiative (DSSI) by April 2022, only three countries have taken part in the Common Framework for Debt Treatment beyond DSSI. To better operationalise the Common Framework, the G20 should incentivise private and public creditor participation including those of Non-Paris Club members. In addition, G20 members should encourage the application of the comparability of treatment clause and urge multilateral creditors to participate in the debt restructuring process. The G20 should encourage full disclosure of debt among creditors by promoting the OECD Debt Transparency Initiative and by adopting the G20 Operational Guidelines. Moreover, the G20 should support local capacity building for public financial management in LICs and should promote that debt treatment under the Common Framework is subject to scaling up sustainable investments in debtor countries. Finally, the G20 should use its weight in the managing boards of the international financial institutions to push IMF-WB debt sustainability analyses to better include sustainability criteria.

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The pandemic has taken a heavy toll on the global economy. The sources of economic growth and productivity gains have been constrained, and poverty and inequality have risen sharply. In addition, fiscal space has been severely educed and public debt levels have risen at an unprecedented speed. To accelerate the recovery from COVID-19 and make it more sustainable, it is urgent to reconsider debt-restructuring strategies.

This policy brief describes the pitfalls in current approaches to debt restructuring for assessing sustainability in low and lower-middle income countries, proposes a reframing of debt sustainability analysis to take into account social and environmental sustainability and provides concrete examples of initiatives based on the experiences and challenges of the developing world.

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