Reducing Nigeria’s alarming poverty rate – Punch

Nigeria —sloppy, self-styled Africa’s giant— is currently sitting on a powder keg with the increasing number of its impoverished citizens helplessly pushing the poverty index to an alarming tempo. A new World Bank report paints a grim picture, requiring an urgent, pragmatic approach by state actors to determinedly halt the tide of poverty.

The report showed that about 2,969,158 Nigerians entered extreme poverty between April and October 2019. It noted that about 94,470,535 million people in Nigeria live below the extreme poverty line. The report also identified the country as the largest poor population in sub-Saharan Africa, with 79 million extremely poor in 2018.

The bank’s biennial ‘Poverty and Shared Prosperity Report,’ revealed that the country accounts for 20 per cent of the total poor in the region. It also bleakly projected that the number of poor Nigerians would increase from the current 90 million to about 100 million by 2022 arising from the impact of the COVID-19 pandemic on the economy. Poor and vulnerable people live below the poverty line of $1.90.

For any government alive to its socio-economic duties, the recent World Bank disclosure that its estimates showed that between 15 million and 20 million Nigerians would join the poverty rank by 2022 should call for a prompt action.

Clearly, the North accounts for much of the national poverty mess. The poverty rate in the North-East and North-West zones of Nigeria is 77.7 per cent and 76.3 per cent respectively, and 67.5 per cent poverty rate in the North-Central zone. The government has to look beyond basking in the euphoria of shallow feats in a troubled economy struggling on a dwindling mono-economy and regular handouts from the centre to generate realistic policy and economic frameworks. The non-viability of many states hinders national growth and sustainability. The African Development Bank has revealed that the poverty rate in more than half of Nigeria’s 36 states was above the national average of 69 per cent.

It is argued that electrification and policies to boost educational enrolment and attainment may be particularly important channels for reducing monetary poverty in Nigeria. The education, health and manufacturing sectors are key areas governments can explore to open up the economy. Many states continue to waste funds on unviable airport projects and religious jamborees to the detriment of infrastructural projects. They incur colossal loans on futile projects with no precise repayment plans. The leakages should be plugged and the savings diverted to vital areas for improved productivity. The country will retain the undesirable status of the world’s poverty capital and home to the jobless and the poorest until states become self-sufficient entities and economic drivers.

The AfDB has noted that the country’s manufacturing sector continues to suffer from a lack of financing. Government at all levels cannot pretend to be unaware of this gloomy development in a country where profligacy flourishes unhindered. The nation’s comatose power sector needs to be revamped to breathe life into the dragging manufacturing sector. The power sector should be a major driver of the national economy, but it is sad that the sector has terribly deteriorated based on current reality and revelation by the President of the Senate, Ahmad Lawan, last year that Nigeria was losing $29bn annually as a result of poor power supply.

Government at all levels must realise that their role in the economy is a facilitator cum regulator of economic growth and development and not a concerned participant. Government should not have a finger in every pie of the economy. Rather, it ought to be concerned about promoting free enterprise and market economy. Examples abound of countries on unique missions in Africa. The landlocked country in Southern Africa, Botswana, is one of them. It was regarded as one of the world’s poorest at independence with a plethora of challenges despite its discovery of gold deposits. But imbued with the right leadership and grit, Botswana saw early the task ahead. It wholly engaged the private sector, initiated programmes to boost production and employment in rural areas, including generating social safety nets. Its strategy was a top-down approach with the realisation that growth would drip down to the poor, methodically, without concentrating on poverty reduction.

The country’s Ease of Doing Business index should be transparently executed, not on paper but in practice. The Small and Medium Enterprises are critical to tackling poverty and the government must support them through enhanced funding. The Small and Medium Enterprises Development Agency has noted that 40 million of businesses in the country, representing 96 per cent, were not formalised enterprises.

The Director-General of SMEDAN, Umar Radda, stated this much during the defence of the agency’s 2021 budget proposal before the House of Representatives Committee on Poverty Alleviation, noting that efforts by the agency to partner state governments to create more wealth for citizens through SMEs were being frustrated. Depending on transfers of paltry cash to selected citizens to tackle poverty is a lazy approach to fighting poverty. The earlier this is realised the better. Government must provide an enabling environment for job creation to ensure sustainability and aggressively open up non-oil sectors to drive the economy. Nigeria has the human and material resources to achieve its set economic goals, but greed and lack of focus continue to stunt its potential. The federal and state governments should forge strong partnerships with the private sector to harness these advantages to defeat poverty.

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