Tell Magazine

By AKPAN H. EKPO

The recently published Nigeria Poverty Profile 2010 Report by the National Bureau of Statistics, NBS, confirms that more Nigerians are becoming poorer. The report based on a robust Harmonised Nigeria Living Standard Survey, 2009/10, clearly indicates that the country’s relative poverty increased from 54.4 per cent in 2004 to 69 per cent in 2010, reflecting that 112,518,507 Nigerians live in relative poverty.  Based on absolute poverty measure, Nigerians living in poverty increased from 54.7 per cent in 2004 to 60.9 per cent (99,284,512 Nigerians) in 2010.  Using the dollar-per-day concept, poverty in the country jumped from 15.6 per cent in 2004 to 61.2 per cent in 2010.  In respect of the subjective poverty measure, 93.9 per cent of Nigerians considered themselves poor in 2010, compared to 75.5 per cent in 2004. The NBS projection is that the poverty situation would worsen in 2011 if the basic assumptions used in the 2010 study remained the same.

By any measure of poverty, millions of Nigerians are in poverty despite the growth of the economy in the last five years. The poverty situation, though disturbing, is not surprising.  The rate of unemployment is about 24 per cent; the rate of inflation is around 11 per cent; lending rates are about 22 per cent (real sector is not growing); new factories are not being built to employ those willing and able to work.  The Nigerian economy is driven by oil and the services sectors. Since the oil sub-sector has no positive linkages with other sectors of the economy, its job creation potential is limited. Agriculture is essentially peasant and increased production depends on rainfall and perhaps increased acreage. The individual sector, particularly manufacturing, contributes about four per cent to the gross domestic product, GDP. The economy produces (crude oil export) what it does not consume and consumes (all kinds of imported goods and services) what it does not produce. The traumatised nature of the economy cannot reduce poverty both in the medium and long-term.

The public educational system, from primary to tertiary, is nothing to write home about. Education used to be the fastest approach to conquering poverty. Our present public school system is a training ground for misfits.

I am yet to find any minister and/or commissioner of education that sends his or her child/children to public schools, particularly at the primary and secondary levels.  This would be a true test of the quality of education at those levels.  Consequently, children from poor homes attend these so-called schools and graduate into the poverty cycle and, in an attempt to break away from poverty, become armed robbers, kidnappers, etc. The dual school system – one for the rich and the other for the poor – cannot reduce poverty. The public health system is for the dogs in most parts of the country. Rich Nigerians with the slightest headache fly to hospitals in Europe, America and Asia for treatment while the poor are sentenced to die in their own country that is endowed with so much human and natural resources.

It is clear from the NBS report that there is no middle class in Nigeria. A large middle class would reduce the poverty incidence. There exist a few, well paid Nigerians scattered all over the country. I refer to them as the ‘bribed’ segment of the working class. Any economy that wants to grow, develop, sustain and reproduce itself must have a large middle class which, as well, should gain a regular, frequent entrance  into that class. It is the middle class that would provide ‘safety mechanism’ for the rich to enjoy his wealth. The moneyed elite in Nigeria often surround themselves with body guards for fear of being attacked, etc. Invariably, it is in the interest of this elite to be enlightened and to align themselves with governments to address the embarrassing poverty situation.  Another disturbing trend is the widening income inequality, further confirming the non-existence of a middle class.

It is, therefore, necessary that emphasis on growth without development is illusionary.  The economy had a growth rate of 7.7 per cent in 2010 while its rates, paradoxically, of unemployment among all categories of skills were high.  The jobless growth rate cements the bankruptcy of the so-called ‘trickle-down capacity of macroeconomic policy to reduce poverty.  The Nigerian economy has been growing positively, yet growth has not trickled down to reduce poverty.  The growth is not pro-poor.  It is crucial to state that poverty reduction requires deliberate intervention by government in the conceptualisation, formulation and implementation of strategies and programmes that would squarely tackle the poverty scourge.

In fairness to government, there have been several institutions and projects aimed at poverty reduction over time.  These include the People’s Bank; Community Banks; Small-Scale Credit Schemes; National Directorate of Employment, NDE; The Family Support Programme, FSP; Directorate of Foods; Roads and Rural Infrastructure, DFRRI; Family Economic Advancement Programme, FEAP; Petroleum Trust Fund, PTF; and many others.  During president Olusegun Obasanjo’s first term, the National Poverty Eradication Programme, NAPEP, was established as the coordinating body for poverty reduction.  Why have these initiatives not improved the poverty situation in the country?  Is it not time we began to design and implement safety nets and welfare programmes to address particularly persons who have lost their jobs?  The NBS’s 2010 Poverty Profile Report once again re-echoes the urgency of perceiving poverty reduction as one of the major objectives of government at all levels.  It is sorrowful and disturbing to have poverty in the midst of plenty in a resource-endowed nation like Nigeria.

(Ekpo, Professor of Economics, is director-general, West African Institute for Financial and Economic Management, Lagos.)