When it comes to dislodging the excruciating poverty afflicting its people, Nigeria has a mountain to climb. Regardless of this, President Muhammadu Buhari is hopeful of a better future for the downtrodden in the country. Drawing inspiration from other countries that are overcoming similar odds, the President, on Democracy Day 2019, promised that the ruling All Progressives Congress government would lift 100 million Nigerians out of poverty in 10 years. This is a worthy pursuit, which resonates with the times. The President says his government has been developing policies, measures and laws that will unite the people and reduce inequality. “This task is by no means unattainable,” Buhari argued. “China has done it. India has done it. Indonesia has done it. Nigeria can do it. These are all countries characterised by huge burdens of population. We can do it.”
Truly, as one-time United States President, John F. Kennedy, said, “The problems of the world cannot possibly be solved by sceptics or cynics, whose horizons are limited by the obvious realities. We need men who can dream of things that never were and ask, why not?” Nonetheless, Buhari’s projection is a familiar refrain from public officials. Like several other pronouncements they (the officials) make, it is short on details. That introduces a cloud of doubt because taking millions out of poverty is not achieved by mere declaration.
The reality is that, while the rest of the world has seen major progress, Nigeria has witnessed retrogression in poverty reduction. From 1990 to 2015, it is reported that 1.06 billion people were lifted out of extreme poverty in the world. But today, Nigeria leads the countries that combined, still harbour about 1.3 billon poor people. Currently, inflation is in double digits — 11.4 per cent — says the National Bureau of Statistics. Businesses find it extremely difficult to access loans. The benchmark rate is 13.5 per cent; actual lending can fly to 30 per cent. It is not the only hindrance to job or wealth creation, which is integral to poverty eradication. The electricity supply gap is huge. To create stability in the forex market, the Central Bank of Nigeria defended the naira with $42.3 billion in the year to March 2019.
The NBS puts unemployment rate at 23.1 per cent, underemployment at 20.21 per cent and youth unemployment at 55.4 per cent. This indicates a prevalence of poverty. Nigeria became the butt of international jokes in 2018 after the World Bank and other multilateral organisations declared it the global capital of extreme poverty. The Austria-based World Poverty Clock says 93.8 million Nigerians, as of June 2019, suffer from extreme poverty. That is 47.7 per cent of the population, with a current escape rate of minus 4.5 per cent. Six Nigerians plunge into extreme poverty every minute. This is not happening by accident. Although the economy is experiencing sluggish growth and can barely provide for its teeming citizens, Nigeria also has a high birth rate. The World Population Prospects estimates that though 6,398 people die daily, 20,496 are born, approximately a net increase of almost 14,000 per day.
This is a time bomb. At Independence in 1960, Nigeria numbered a mere 45 million. With an average birth rate of 2.6 per cent now, the population has skyrocketed to about 200 million, the seventh largest in the world. At the current birth rate, Nigeria is on course to be the fifth largest country by 2030 with a population of 262 million. By 2050, it will ascend to the number three position, having 401 million people, just behind India and China. With its level of resources and infrastructure, this will be doubly catastrophic.
What should be done? There has to be a deliberate government policy to reduce significantly the perilous population growth. In China, the basis was population control and economic liberalisation. The McKinsey Global Report 2018 states that China is the top nation in this worldwide, lifting 713 million out of poverty between 1990 and 2013. India, with 170 million, was second. It achieved this by operating true federalism, encouraging the federating units to compete and growing its economy by seven per cent annually in those years. The Indian government’s method also included food subsidies, promotion of family planning, education, increased access to loans and agricultural techniques.
For Nigeria, the states are not productive and the Federal Government is not much better. For Buhari to achieve his vision, he must buy into the idea of true federalism, in which the federating units will transform to economic centres. He has to climb down from his belief that the central government can achieve poverty eradication with the seriously faulty federalism. The present centralised political structure cannot deliver any outstanding economic growth. The bountiful natural and human resources remain largely under-utilised as a consequence of our centralised political structure. The states will become productive, innovative and self-financing when the country adopts basic principles of federalism.
Nigeria needs a market-led drive to alleviate poverty. The Nigerian economy is fundamentally weak. It is disarticulated, corruption-prone, debts are preponderant and insecurity is a drawback to foreign direct investment. True, Nigeria was sliding into recession when he assumed power in 2015, but Buhari has not done a better job than his predecessors. There should also be a doable plan to preventing another economic crisis. According to the International Monetary Fund Managing Director, Christine Lagarde, it takes 6-12 years for developing countries to return to pre-crisis per capita GDP levels after an initial output drop. The stalled economic liberalisation and privatisation programme should be restarted, power crisis realistically and permanently resolved and the economic diversification policy pursued with uncommon vigour. Buhari should encourage private capital to participate in the rail, oil downstream, aviation, steel and maritime sectors, leaving government to concentrate on providing infrastructure and social services. This is the time-tested tilt to lift people out of poverty. The downstream oil sector should be liberalised; the four decrepit and loss-making refineries sold and investors encouraged to build refineries.
The persistence of rural poverty must end. Poverty eradication is ultimately about enriching human lives and enabling human potential. A growing prosperous economy requires a healthy, educated citizenry. Like China did for decades, the three tiers of government should adopt a multidimensional strategy for poverty reduction that focuses on expanding income-earning opportunities, enhancing security, and promoting empowerment. The Communist Party of China and the Chinese government have always been putting the Chinese people first, and attaching great importance to poverty alleviation and development, which is regarded as the historical mission and major responsibility of the CPC and Chinese government. The Buhari government should ensure that its cash transfer policy works. There is solid evidence that social policies targeted at reducing poverty and promoting human development can have a powerful impact. For example, conditional cash transfer programmes in Brazil and Mexico contributed to about 20 per cent of the decline in inequality over a 10-year period.
Improvement of the rural economy will give poverty eradication a great leap forward. Globally, it is said that about 1.3 billion people still live on less than $1.25 a day and over three-quarters of those are in rural areas. But at present, our rural communities where up to 80 per cent of the population lives below the poverty line are largely ungoverned and social services and infrastructure are starkly limited. Any remarkable success in poverty reduction by this and succeeding governments will depend so much on policies and investments that will secure rural communities, strengthen rural productivity and build the infrastructure that they depend on.
Can Buhari do it?