Nigeria’s worsening poverty index rating

Despite repeated official denials and lies and somewhat feeble attempts, over the years, to alleviate poverty in the country, the monster is persisting.

Poverty in Nigeria is actually on the rise, with no signs of slowing down, at least not for now.

The irony is that while some countries are escaping poverty, Nigeria seems to be embracing extreme poverty given available data and indicators.

About 90 million people – roughly half of Nigeria’s population – live in extreme poverty, according to estimates from the Brookings Institute, World Data Lab’s Poverty Clock. Around June 2018, Nigeria overtook India, a country with seven times its population, as the country with the largest number of people living in extreme poverty in the world.

Strangely, the report was debunked by the Federal Government, even though, it could not show where it had reduced poverty in real terms.

For most Nigerians, It was not surprising that the 2019 global multidimensional poverty index, once again, ranked the country among the poorest in the world.

The United Nations report unveiled in New York recently revealed that Nigeria is conspicuously among other countries like Bangladesh, DR Congo, Ethiopia, Haiti, among others that still have below 40 per cent growth rate.

The UNDP Head of Communication Unit, Lucky Mosunda, said that experts would present new findings on poverty from 101 countries, representing 76 per cent of the world’s population.

He said that the 2019 global multi-dimensional poverty index challenges the traditional notions of where poor people live and how they experience penury and inequality, the complexities of poverty in the 21st Century, which show that the conventional ideas of rich and poor countries are now outdated.

Previous rankings by different international bodies and institutions reached the same verdict, which underscores the fact that Nigeria’s toga of mass poverty has become a global issue. The fact that the monster is worsening daily calls for great concern, as well as a drastic change in the way and manner the issue of poverty has been treated in the country.

Extreme poverty statistics have always been controversial and contestable. Some countries and experts disagree with the way it is measured in monetary terms – the World Bank’s $1.90 earnings- per-day benchmark.

But no matter what the arguments might be, at the root of poverty lies the deprivation of people’s access to basic necessities such as food, healthcare, and sanitation, education and assets. And the evidence, for instance, from India shows that solving these issues generally lifts populations out of extreme poverty.

The opprobrium handing on the neck of the nation is that the country has become the poverty capital of the world.  A country that given its endowment: human and resources should not have an appointment with poverty in any measure of sense.

The development corroborates the British charity, Oxfam’s index, which has also raised the alarm that about 69 per cent of the Nigerian population lives below the poverty level. Why Nigeria, Africa’s most populous and arguably the richest in terms of human and material endowments is always ranked among the poorest in the world has remained curious to experts. To critical Nigerians, it is a jinx, which they say needs to be broken by the governing elite in the country.

But beyond any shadow of doubt, Nigeria doesn’t need an Oxfam to know that a clear majority of citizens are denied the most essential elements of a dignified life like access to quality education, healthcare, and decent jobs. It is so disheartening that Nigeria’s poverty status has become a subject that experts and institutions around the world constantly broach.

Renowned capital market expert and founder of Cowry Asset Management Limited, John Chukwu told Sunday Sun that part of the reasons Nigeria has remained among the poverty nation’s is simple: her population grows more than the economy. For instance, he disclosed that while China’s population grows at 0.2 per cent, its economy grows at 6.5 per cent and this keeps the country on the prosperity pedestrian.

He said that Nigeria’s population grows at 2.7 per cent while the economy is growing at 2 per cent, indicating that poverty will be increasing by the day.

Chukwu said: “One fundamental reason is that our population is growing faster than the rate our economy is growing.  Our population is growing at 2.7 per cent while the economy is growing at 2 per cent, so every day that passes we will produce less than the number of people who are born to consume it, and this means that poverty rate will be increasing unless you rise to the challenge and do the needful.

“If 10 people are sharing 10 oranges and each gets 1, if tomorrow we become 12, it will now be 0.8 and as we grow in number what each person gets from the sharing will continue to decrease unless if the oranges are also growing with the increase in individuals sharing it. China population is growing at 0.2 per cent while the economy is growing at 6.5 per cent, so you can see why they are where they are”.

Also celebrated economist and Managing Director of Cocosheen Nigeria Limited, Lagos, Henry Boyo, told Sunday Sun, that the poverty malaise would continue as long as the positive indices that can drive the Nigerian economy are lacking. He is irked that those who have the responsibility of managing the economy seem to be running it in reverse gear, ignoring provisions of international best practices.

His verdict is that “you must put into consideration the parameters of inflation, interest rate and exchange rate at all-time in the economic development of a country, if not you will continue to be confused and think that maybe, we have become cursed.”

His words: “The reason we are where we are is a very simple answer. The process of wealth creation in any modern economy is driven by the method in which banks lend out money to people to do businesses, create products and also create jobs. Unfortunately, if you don’t respect the process, that is international best practice in creating wealth and employment you will have the kind of situation in which we find ourselves at the moment.

“The resources human, material or mineral can only be consolidated or galvanized, by providing funds from investors to access and produce. In the process of producing they will employ more people. If on the other hand, you sustain a system whereby you have constant excess money supply given the limited goods and services, which is available in the country, what you will have is an imbalance that will continue to make inflation very critical in the purchasing decision of everybody.

“In other words, the bread that you used to buy for a N100 will become N200 or N300 that will create problems for every individual household in Nigeria. So, the long and short of it is that if you have resources both material and human and you are not able to create an enabling environment that accommodates low inflation rates, best practice rate of not more than two or three per cent you will find that the cost of fund inflation will go very high and the cost of funds normally must be higher than the rate of inflation, so inflation determines the cost of funds.

“You will find that there is no way that you will have so much money within the system without inflation being a problem. In best practices, inflation everywhere is usually not more than three per cent.  In countries with best inflation practice you will find that if you earn a N100,000 today you are sure it will be stable in value for at least three, four, five years, but if you earn N100,000 in Nigeria with inflation at anything from 10, 12 to even 18 per cent, it means that every five years or more you will be losing anything above 50 per cent of the purchasing value that you have five years previously.

“Consequently, you find that if inflation predicates the cost of funds and the inflation is 18 per cent, you will expect that cost of funds or cost of borrowing could be 20, 25 or even 30 per cent. When you have that kind of mix it becomes impossible for the consumer to keep buying the number of things they used to buy because inflation has ravaged their income and this is repeated in every household in the country.

“The process starts with the maintenance of low and stable inflation rate, not more than three per cent. If you veer or take your gaze away from that you will become as confused as everybody else and wonder why: you have resources, you have everything, but nothing is working, so we need to bear in mind that the resources will not get themselves together by themselves and produce so that you can make money.

“The process that you can use for converting those resources into material wealth is by first recognizing the role that inflation plays in all these things. Inflation is critical. If you have so much inflation within the system chances are that before you take your money to the market the prices have gone and all that.

“So, you must respect that in other to galvanize these various resources that you say you have, the factors of production must be brought into play. Those factors of production cannot be brought into play without funds, those funds if they are too expensive and you have to pay, let’s say over 20 per cent or more, industrialists will not employ people or they may even begin to sack.

“Like the way and manner, most of our monetary authorities are foolishly throwing money at all kinds of problem thinking that it’s the solution.  Already there is an undeniable surplus of cash supply, then you are creating a paradigm that ensures that inflation will go higher and when inflation goes higher and people lose so much of their purchasing power they purchase less. You must put into consideration the parameters of inflation, interest rate, and exchange rate, if not you will continue to suffer poverty endlessly the way we are having it in Nigeria”.

Some economic experts believe that a different socio-economic model, coupled with unfailing resolve and commitment in implementing people-oriented government policies and programmes is needed. The authorities should do something to reverse the ugly trend that has given Nigeria a bad image.

The agreement by economic observation is that Nigeria is too endowed to be poor.

To start with, a lot has been said about the return to agriculture. Nigeria has vast arable land for agriculture that should be cultivated to provide food and raw materials for industry. Unfortunately, the land is abandoned in pursuit of oil money that is largely stolen. The ordinary citizens are left forlorn.

A vibrant agricultural policy across the states of the federation it is believed would provide food and jobs through value-chain in productive ventures. A situation where basic staples like rice are imported promotes unemployment, hunger, and poverty and must be discouraged.

President Muhammadu Buhari’s recent comments on the excruciating poverty in the country to the extent that the situation has made him uncomfortable is yet to receive commensurate attention by his government despite claims of his leadership that much has been done to reduce poverty in the land.

Reaching the Poverty Reduction Sustainable Development Goal (SDG), which Buhari promised to achieve its target requires specific strategies, programmes, and tools.

Experts say to achieve sustained poverty reduction as projected by the Nigeria’s leader, the country must pursue economic growth programme that involves and benefits poor people such as infrastructure development.

Although it was not identified as a direct SDG target or indicator, the provision of infrastructure is an essential facilitating measure for economic growth, local development, and poverty reduction.

This may account for why the Federal Government has given priority to the provision of adequate transport facilities to meet the needs of the rural population through the Rural Access and Mobility Project, phase two (RAMP-2), and its successor, the Rural Access and Agricultural Marketing Project (RAAMP).

The truth is that not much impact has been achieved by most of the Federal Government projects, the reason for another look and proper reassessment of its projects.

At the moment, Nigerians want to feel the real impact of what the government is claiming to have done, as you do not tell a blind person that there is salt in the soup. Let Nigerians say that of truth, poverty has been banished rather than rhetoric’s from government while the monster abound.

It is time to genuinely invest in education, invest in health and wellbeing of the people, expand economic opportunities and embrace technology.

Ending poverty in Nigeria, experts have argued, will entail improving the country’s economic productivity and opportunities for its citizens by creating a diversified economy. This will mean, looking beyond oil, investing in human capital potential and creating jobs for women and young people, increasing financial access and opportunities to the rural communities, and advancing technological innovation.

(The Sun News)