Nigeria, to some keen observers, has remained a curious paradox of privations in the midst of plenty. This is a country that sometimes manages to present to the global audience a facade of affluence, maybe because of her abundant endowment of human and natural resources, yet remains home to a large population of the poorest people. As far back as 2013, the World Bank had ranked Nigeria as the country with the third largest number of poor people on earth, behind India and China. The number has since increased.
According to a report credited to the Statistician-General of the Federation and Head of the National Bureau of Statistics, Yemi Kale, the number of Nigerians under the poverty threshold increased from 54.4 per cent in 2004, when oil prices were just experiencing a rebound from one of the worst market depressions in the industry, to 69 per cent in 2010, at the peak of some of the highest upward rallies ever.
With the descent of the Nigerian economy into recession between 2015 and a good part of 2017, however, the situation has since worsened. The African Development Bank now puts Nigeria’s poverty measurement at 152 million people from 112.5 million people in 2010. This is almost 80 per cent of a galloping population currently estimated at close to 193 million. The International Monetary Fund has also confirmed the obvious that Nigerians are getting poorer, despite the escape from recession and oil prices topping the $80pb mark.
It has been a country of deep-seated inequality, accentuated by bad governance and inefficiencies in resource allocation; it is a country of disproportionately affluent tiny minority – not necessarily because they are more hardworking or more intelligent – while the huge majority wallow in poverty. At a time when the country made more money than ever before, when crude oil, her main article of trade in the international market and biggest foreign exchange earner, was going for more than $100 per barrel for a sustained period of more than five years, the country’s poverty rate inexplicably went through the roof, instead of heading south like other oil producing states.
Specifically, when the country’s economy was experiencing a growth rate averaging over seven per cent, hailed then as one of the fastest growing in the world, a 2014 World Bank report for the previous year cut short the celebrations by revealing that 80 million Nigerians (just over 40 per cent of the population then) were living below poverty line. It was an economic growth based essentially on increased oil production at favourable prices; it was a growth that lacked inclusiveness.
Undoubtedly, one of the reasons for the Nigerian paradox has been the high rate of unemployment, which cannot be divorced from the lack of deliberate government policy to diversify the economy and create jobs. This has been confirmed by a recent report by the World Bank entitled, “Connecting to Compete.” The report, which sadly reflects the mood of many Nigerians, paints a bleak picture of a country where the poverty level has increased despite clawing her way out of a debilitating recession.
Although the World Bank report stated that the Gross Domestic Product witnessed a growth of 0.8 per cent in 2017, driven by a late rally in prices of oil and an increasing growth in agriculture, many Nigerians have not felt the impact of the turnaround because jobs are not being created. In fact, an NBS labour statistics for last year showed that between January and September 2017, about 4.07 million Nigerians lost their jobs. A combined unemployment and underemployment rate has been put at an unacceptable level of 40 per cent.
Although it is believed that the level of growth so far in the economy is still too weak to sustain job creation, the Nigerian government has to take steps that will help to cushion the excruciating effect of poverty in the land. For instance, it is difficult to discuss job creation without power, the lack of which makes Nigerian goods extremely uncompetitive. This is a disincentive to job creation.
It is obvious that government’s direct involvement in job creation cannot go far; there is the need for policies that will create an enabling environment for private sector-driven job creation initiatives. Instead of initiatives such as the Youth Enterprise With Innovation in Nigeria, the government should concentrate on opening up the rural areas, so that agricultural products can be moved easily to the cities where they are needed.
Besides, Nigeria should move away from the export of raw commodities to adding value to export-bound products. Instead of selling raw cocoa seeds abroad, for instance, they could be processed before being exported. Such an initiative will not only create job but will enhance revenues of the companies involved and the country. That is one of the ways in which Brazil has managed to grow its economy. For, as long as a country remains an exporter of commodities, its economy will continue to remain underdeveloped and cannot have much say on the price of the goods it is exporting.
Nigeria is already doing well with rice production, but stronger policies should be put in place to develop other aspects of agriculture, as well as the exploitation of the numerous mineral resources God has blessed the country with. The government should take attention away from oil, whose impact on job creation is limited. Access to loans should also be guaranteed at reasonable interest rates. Population control should be encouraged now than ever before.
Ultimately, the country can only be well placed to provide maximum benefits to Nigerians by opening up for foreign investment. This can only come through attractive investment environment. This will include a reduction in the level of insecurity, development of infrastructure and a legal framework that will protect investors’ capital. This is only natural as capital will only flow to where it is safest.