Nigeria may retain title as world poverty capital in 2022 — NECA, Rewane, others

Posted by News Express | 18 December 2021 | 655 times

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•President Buhari


Ever since the COVID-19 pandemic and growing poverty threw up the need to assist the vulnerable Nigerians with palliatives and assist small businesses to grow with the aim towards pulling many out of poverty, some have testified of getting government assistance. However as poverty continues to ravage the country; many still see it as nothing but a scam. ROLAND OGBONNAYA, CHIDI UGWU, and OYIN SOMORIN

Mrs. Happiness Adeosun is an old widow who re­sides in the Ayobo area of Lagos State. During the COVID-19 lockdown, she said some people came and told them that they were from the government in search of widows and old people in need.

“They gave us an address at Aki­ogun for us to gather. When we got there, we were asked if we had bank account numbers, which we are to submit. Some of us, including my­self didn’t have. We were told to come with a passport and electricity bill that they would use in opening an account for us. We left happily, only to come back the next day and we were given a ticket number and were asked to bring the sum of 3 thousand naira for registration. We paid the money and since then it’s been one excuse or the other. I later got tired and didn’t bother going any more with the hope that one day I will be called since they have my details. This was last year and till date, I ha­ven’t been called and my money was not returned.”

Mr. Jide Babalola is a bus driver that shuttles between Ayobo and Os­hodi and had a similar experience. “Government should help and not defraud us.” To say that many Nige­rians are deep in poverty is an un­derstatement and the government knows it.

But Nigerian President, Muham­madu Buhari, in 2021, claimed that his administration had lifted 10.5 million Nigerians out of poverty in the last two years. “In the last two years we lifted 10.5 million people out of poverty – farmers, small-scale traders, artisans, market women, and the likes,” Buhari said.

According to the United Nations, a person is considered to live in ex­treme poverty when he or she is liv­ing on less than $1.90 per day. This figure is known as the international poverty line.

According to the World Poverty Clock, a web tool produced by World Data Lab, 77.9 million Nigerians, rep­resenting 39 per cent of the country’s 199 million population, were living in extreme poverty in 2019. A break­down of the data indicated that 61 and 11 percent of people who lived in rural and urban areas respectively made up this figure.

The National Bureau of Statistics (NBS) recently released the “2019 Poverty and Inequality in Nigeria” report, which highlighted that 40 percent of the total population, or almost 83 million people, live below the country’s poverty line of 137,430 naira ($381.75) per year.

The NBS report is based on data from the latest round of the Nigeri­an Living Standards Survey (NLSS), conducted in 2018-2019 with support from the World Bank’s Poverty Global Practice and technical assis­tance from the LSMS programme. Between September of 2018 and Oc­tober of 2019, the National Bureau of Statistics conducted the latest round of the NLSS, a decade after the pre­vious one.

There are many reasons dis­cerning Nigerians do not envy the Minister of Humanitarian Affairs, Disaster Management and Social De­velopment Sadiya Farouq, Minister of Labour and Employment, Sena­tor Chris Ngige, and indeed all those charged with the job of reducing pov­erty and making people’s lives better in Nigeria. One of the reasons is that solving the poverty problems of Ni­geria in the nation’s current econom­ic state is tantamount to climbing the Zuma rock by an amateur climber without any climbing equipment.

Although Nigeria currently occu­pies the odious position of being the poverty capital of the world, there are hardly any discernible indices to point to the country’s recovery in the near future. Almost every expert opinions point to gloom with regard to the poverty state of Nigerians and both state policies and the social life­style of the people combine to con­spire in deepening the economic quagmire of the nation.

The latest report from Nigeria Employers Consultative Association (NECA) shows that the incidence of poverty rose by 10 per cent between 2019 and 2020. In the October 2020 report, NECA said the number of citizens in extreme poverty stood at 102 million representing 50 per cent of Nigeria’s estimated population of 205 million.

If the figures are scary, the anal­ysis of one of Nigeria’s best econo­mists, Mr. Bismarck Rewane, Man­aging Director, Financial Derivatives Company (FDC) Limited and a mem­ber of President Muhammadu Bu­hari’s Economic Advisory Council (EAC), would even give one a sense of the deep trouble the country may be in.

Mr. Rewane said recently that Ni­geria remained the poverty capital of the world and listed some develop­ments that should worry Nigerians, including the falling of total capital importation to $875.62 million in Q2’21, from $1.91 billion in Q1’21, and the crashing of the parallel market rate to N526/$ on Foreign Exchange (FX) supply shortages. According to him, Nigeria’s second quarter year-on-year positive Gross Domestic Product (GDP) has yet to have a sig­nificant impact on socio-economic conditions.

“Fastest growing sectors were the most impacted by the (COVID-19) shutdown. They are job-elastic and have the potential to boost produc­tivity. Real GDP (2.7 per cent) is still below potential GDP (8.3 per cent). The economy is still in a recession­ary gap. Population (3.2 per cent) growing faster than GDP.

“Nigeria stills the poverty capital of the world: 93.9 million people now live below the poverty line. Youth un­employment is fast approaching 45 per cent. The misery index is 50.68 per cent. Nigeria is a hunger alert hotspot, according to FAO and WFP. Over 18,000 Nigerians are seeking asylum. Health sector brain drain rising (e.g. about 500 doctors moving to Saudi Arabia),” he said.

Nigeria’s economic outlook remains highly uncertain in the sense that while it has made some progress in socio-economic terms in recent years, its human capi­tal development ranked 150 of 157 countries in the World Bank’s 2020 Human Capital Index. The country continues to face massive develop­mental challenges, including the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, build strong and effective institutions, as well as address governance issues and public financial management systems.

Inequality, in terms of income and opportunities, remains high and has adversely affected poverty reduction. The lack of job opportuni­ties is at the core of the high poverty levels, regional inequality, and social and political unrest. High inflation has also taken a toll on households’ welfare and high prices in 2020 are likely to have pushed an additional 7 million Nigerians into poverty in 2020.

As simple as these may sound, they have brought upon Nigeria a myriad of challenges ranging from the lack of adequate fiscal revenue, weak institutions, lack of accountability, and limited policy consistency across dif­ferent administrations to the poor regulatory framework, compounded by graft and the limited maintenance of existing infrastructure and exacerbated by a rapidly growing population, all of which add strain on the al­ready inadequate infrastructure stock. Instability in the political landscape and increased vulner­ability of the nation to social violence and terrorism has also served to deter investors, factors which have left the country’s economy grossly in deficit in in­frastructure.

The lack of infrastructure devel­opment may pose a herculean task in getting Nigeria to rise above the title of the poverty capital of the world. This is considering the fact the huge financial outlays required to fix the nation’s infrastructural de­velopment which financing shortfall is estimated at a staggering $3 tril­lion over the next 30 years.

According to the Central Bank Governor, Godwin Emefiele, while the infrastructure deficit in Nigeria is estimated to be about 1.2 per cent of GDP, it is projected that the Fed­eral Government needs to commit about $100 billion amounting to N4.1 trillion annually, to address the na­tion’s infrastructural deficit.

In the 2022 Budget proposal, infrastructure allocation stood at N1.45 trillion (8.9%) while Social Development and Poverty Eradica­tion N863 billion (5.3%) of the entire allocation. If the 2022 budget propos­al is anything to go by it, therefore, becomes obvious that Nigeria has a very long way to go with regards to solving the problems of poverty which is tied to infrastructure devel­opment and social welfare.

In terms of social welfare, even the little efforts made by the govern­ment is allegedly sabotaged by a few corrupt individuals who choose to enrich themselves and their cronies instead of playing by the rules for the benefit of the greater population of the country.

For instance, an anti-corruption group, the Centre for Monitoring and Evaluation (CME) said in its report that the procurement process­es at the Ministry of Humanitari­an Affairs, Disaster Management, and Social Development are flawed to protect the interest of a selected few. The report also revealed that cronies are allegedly used to siphon funds under the various social inter­vention programmes of the Federal Government.

According to the organisation, amongst the parastatals under the Humanitarian Ministry, the Nation­al Emergency Management Agency (NEMA) responsible for managing disasters in the country is the worst hit in terms of fraudulent contracts. NEMA has been adjudged the worst in terms of violating procurement processes.

“The conditional cash transfer regime has been plagued by incon­sistencies and duplication of benefi­ciaries. The CTC register contained names of non-existent persons, and the monies supposedly received by these people are routed to a pool managed by some cronies of highly placed officials.

“The NPower scheme was also not left out of the scrutiny of the CME; it stated that the NPower scheme had fallen short of stan­dards. The recruitment into the scheme was alleged to be in favour of a specific ethnic and religious group in the country. The benefi­ciaries’ batch C stream of NPower was largely put together favouring a particular ethnicity and religion,” stated the group.

Apart from corruption, wide­spread poverty and insecurity anoth­er factor that will continue to force Nigeria down the abyss of poverty is the lifestyle of the citizens where foreign goods are preferred to locally produce ones, thereby empowering foreign nations to the detriment of the country.

Mr. Ebube George, a scientist and international businessman share this position. He said the Ministry like the entire body of Government lacks the capacity for hard think­ing that breeds positive economic evolutionism and frontiers for the Nigerian people and society at large. “From the recycling of new policy directions to the quality of those who head the Ministry is no excep­tion, the outcomes and results show verifiably that no new lessons or im­proved applications of new ideas,” he said.(Saturday Independent: Excludes headline)

Source: News Express

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