Israel/Hamas Conflict Could Distort Global Commodity Markets –World Bank

Although the global economy is in a much better position than it was in the 1970s to cope with a major oil-price shock, an escalation of the latest conflict in the Middle East—which comes on top of disruptions caused by the Russian invasion of Ukraine—could push global commodity markets into uncharted waters, the World Bank has said. In its latest Commodity Markets Outlook, released on Monday morning, The Washington based lender said the effects should be limited if the conflict doesn’t widen. The Bank note that oil prices are expected to average $90 a barrel in the current quarter before declining to an average of $81 a barrel next year as global economic growth slows. “Overall commodity prices are projected to fall 4.1% next year. Prices of agricultural commodities are expected to decline next year as supplies rise. Prices of base metals are also projected to drop 5% in 2024. Commodity prices are expected to stabilize in 2025. “The conflict’s effects on global commodity markets have been limited so far. Overall oil prices have risen about 6% since the start of the conflict. Prices of agricultural commodities, most metals, and other commodities have barely budged. “The outlook for commodity prices would darken quickly if the conflict were to escalate,” it said. The report stated that effects would depend on the degree of disruption to oil supplies. According to the global Bank, in a “small disruption” scenario, the global oil supply would be reduced by 500,000 to 2 million barrels per day—roughly equivalent to the reduction seen during the Libyan civil war in 2011. Under this scenario, the oil price would initially increase between 3% and 13% relative to the average for the current quarter—-to a range of $93 to $102 a barrel, the report said. “In a “medium disruption” scenario—roughly equivalent to the Iraq war in 2003—the global oil supply would be curtailed by 3 million to 5 million barrels per day. That would drive oil prices up by 21% to 35% initially—to between $109 and $121 a barrel. In a “large disruption” scenario—comparable to the Arab oil embargo in 1973— the global oil supply would shrink by 6 million to 8 million barrels per day. That would drive prices up by 56% to 75% initially—to between $140 and $157 a barrel. “The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s—Russia’s war with Ukraine. That had disruptive effects on the global economy that persist to this day. Policymakers will need to be vigilant. If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades—not just from the war in Ukraine but also from the Middle East,” said World Bank’s Chief Economist and Senior Vice President for Development Economics, Indermit Gill. The World Bank’s Deputy Chief Economist and Director of the Prospects Group, Ayhan Kose, noted that “Higher oil prices, if sustained, inevitably mean higher food prices. If a severe oil-price shock materializes, it would push up food price inflation that has already been elevated in many developing countries. At the end of 2022, more than 700 million people—nearly a tenth of the global population—were undernourished. An escalation of the latest conflict would intensify food insecurity, not only within the region but also across the world.”

Wale Edun Gets World Bank Appointment

Mr. Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, has been selected to serve as the Chairman of the African Governors’ Forum of the World Bank.  This significant announcement was made by the Federal Ministry of Finance via its official X (formerly Twitter) account. This appointment holds great potential for Nigeria, paving the way for the realization of President Tinubu’s ambitious “Renewed Hope Agenda.”  As Chairman, Mr. Edun is poised to play a pivotal role in shaping policies and initiatives that will have far-reaching impacts on economic development and cooperation across the African continent. Edun said this would create an opportunity to unite the African continent, the finance ministers of Africa, the economic leaders and representatives of governments.

World Bank Support Girls’ Learning, Empowerment In Nigeria With $700m

The World Bank has approved a fresh $700 million loan for Nigeria to boost adolescent girls’ learning and empowerment. According to a statement published on its website, the lender said the new loan will serve as additional funds for an ongoing project known as the Adolescent Girls Initiative for Learning and Empowerment. The Bank noted that apart from the girls that would benefit from the financing, others included over 15 million students and beneficiaries, such as teachers, administrators, families, communities, and staff in existing and newly constructed schools. “The World Bank approved additional financing of $700m for Nigeria to scale up the Adolescent Girls Initiative for Learning and Empowerment programme whose goal is to improve secondary education opportunities among girls in targeted states. “The additional financing will scale up project activities from the current seven states to eleven additional states and increase the targeted beneficiaries to include out-of-school girls, those who are married, and those who have disabilities,” the statement read. The World Bank put Nigeria’s out of school children at over 12 million, with many of them in Northern Nigeria. It was also noted that an estimated one million children were affected by increased insecurity around schools in 2020-2021. The statement added, “In the seven AGILE programme implementing states – Borno, Ekiti, Kaduna, Kano, Katsina, Kebbi, and Plateau – the number of girls in secondary schools has increased from about 900,000 to over 1.6 million. “Under the programme, over 5,000 classrooms have been renovated and over 250,000 eligible girls have received scholarships. “The AGILE programme has supported construction and rehabilitation of WASH facilities in secondary schools and the installation of computers and solar panels which make attending school more convenient and conducive for both girls and boys. Life skills, systems strengthening, and advocacy are other key aspects of the program which address social norms impeding girls’ education.” The World Bank Nigeria Country Director, Shubham Chaudhuri, stated that, “Closing the gender gaps in economic empowerment by ensuring girls have access to education and skills is key for Nigeria’s development and economic prosperity. “Nigeria’s working population will soon be one of the youngest and largest around the world, which means that investing in adolescent girls is imperative when addressing overall economic prospects and growth.”

World Bank partners FG, targets 148m digital national IDs for Nigerians

A new partnership between the federal government and the World Bank will see about 148 million working age Nigerians getting digital National Identity Cards by the middle of 2024. Speaking at a dinner organized by the Ministry of Communications in partnership with the World Bank, World Bank Country Director for Nigeria, Shubham Chaudhuri, reaffirmed the organization’s commitment to eradicating poverty, improving lives and creating job opportunities for the country’s youth. He said the multilateral financial institution is collaborating with the federal government to ensure the successful rollout and registration of digital national IDs for all Nigerians. Chaudhuri said, “Our main mission here in Nigeria is to eliminate poverty, make lives better, and create jobs for all Nigerian youth. One of the areas that we think has the greatest potential is the area of using digital technologies to transform. Now to do that it begins with having this digital national ID. “So one of the main partnerships we have is working with NIMC to ensure the rollout of the registration so that all 213/220 million Nigerians have a digital national ID, beginning of course with all people of working age and I think the target for that is at least 148 million people by the middle of next year. “The second is helping Nigeria lead the broadband infrastructure for broadband connectivity because without broadband connectivity, digital technologies will lead to a digital divide. So their support has been for good kinds of policies and regulations that will help invite private investment into this space and then fibre At the dinner which was organized in his honour, Minister for Communications and Digital Economy, Dr. Bosun Tijani, announced that the Federal Government has secured a $500 million loan aimed at boosting innovation and entrepreneurship within Nigeria’s digital sector. “Part of my responsibilities is working with BoI to ensure that we domicile that funding locally in Nigeria, work with firms who manage and invest in businesses to ensure that those businesses that will benefit are true, real Nigerian businesses,” the minister said.

FG, World Bank train 80 animal health workers in Yobe

The Federal Ministry of Agriculture and Rural Development in collaboration with the World Health Organisation (WHO) on Tuesday, commenced training of 80 private and public health workers in Yobe. Dr Yusuf Maina, Director, Veterinary Services, Ministry of Agriculture and Natural Resources, Yobe, said the programme was being sponsored by the World Bank through the Ministry. Maina said that the aim of the programme was to change the way disease outbreaks were reported from analogue to digital for effective management and control. According to him, the training is nationwide. Today is Yobe’s turn. We have divided the training into two segments because of the volume of participants. “Today we are doing for the Area Officers, veterinaries who are in charge of local government areas and then private practitioners, who operate private veterinary services. The training for other category of participants, the surveillance agents, who are closer to people in the rural communities might be carried out next week. “After the training we will give them applications so that whenever they see anything reportable, they will just input, and the report will go direct to the central device for further action,” he said. Maina said the programme would be dealing with emerging and re-emerging diseases, adding that 75 per cent of the emerging diseases come from the animals’ side. “That is why WHO decided to take what is called one health. That is the human health, the animal health and the environmental health. “Under this one health, we come together, we strategise together and fight diseases together,” he explained. One of the participants, Dr Abdussalam Saleh, the Area Veterinary Officer, Nangere Local Government commended the organisers and described the training as timely. Another participant, Dr Hauwa Daya, said the development would ease their work and make it effective. 

$6trn wasted on subsidies can address climate change – World Bank

Trillions of dollars are wasted on subsidies for agriculture, fishing, and fossil fuels that could be used to help address climate change instead of harming people and the planet, a World Bank report says. The report, Detox Development: Repurposing Environmentally Harmful Subsidies, says global direct government expenditures in the three sectors are $1.25 trillion a year—around the size of a big economy such as Mexico. To subsidize fossil fuel consumption, countries spend about six times what they pledged to mobilize annually under the Paris Agreement for renewable energies and low-carbon development. “People say that there isn’t money for climate but there is – it’s just in the wrong places. If we could repurpose the trillions of dollars being spent on wasteful subsidies and put these to better, greener uses, we could together address many of the planet’s most pressing challenges,” said Senior Managing Director of the World Bank, Axel vanTrotsenburg. The report notes that government subsidies of $577 billion in 2021 to artificially lower the price of polluting fuels, such as oil, gas, and coal, exacerbate climate change, and cause toxic air pollution, inequality, inefficiency, and mounting debt burdens. Redirecting these subsidies could unlock at least half a trillion dollars toward more productive and sustainable uses. The problem is bigger than direct government expenditures. The report assesses the harmful impact of implicit subsidies, which amount to $6 trillion each year. These represent the costs on people and the planet from pollution, greenhouse gas emissions, road congestion, and the destruction of nature ultimately resulting from the subsidies. In agriculture, direct subsidies of more than $635 billion a year are driving the excessive use of fertilizers that degrade soil and water and harm human health. Subsidies for products such as soybeans, palm oil, and beef cause farmers to push into the forest frontier and are responsible for 14 percent of forest loss every year. Fisheries subsidies, which exceed $35 billion each year, are a key driver of dwindling fish stocks, oversized fishing fleets, and falling profitability. With more than 1 billion poor people obtaining most of their animal protein from fish, it is critical that the world’s fish stocks are restored to healthy status. The burning of oil, gas, and coal causes 7 million premature deaths a year around the world through the bad air that people must breathe. The burden falls mostly on the poor. Chief Economist of the Sustainable Development Practice Group at the World Bank Richard Damania, noted that “With foresight and planning, repurposing subsidies can provide more resources to give people a betterquality of life and to ensure a better future for our planet. Much is already known about bestpractices for subsidy reform, but implementing these practices is no easy feat due to entrenched interests,challenging political dynamics, and other barriers.” For successful subsidy reform, governments must compensate the most vulnerable groups through social assistance programs, like cash transfers; build public acceptance through transparent communication; give people and businesses time to adjust; as well as show how freed-up revenue is being reinvested to support longer-term development.