Nigerian Economic Summit Group (NESG) in conjunction with the World Bank, for the umpteenth time, last week, raised the poverty red flag in Nigeria. They forecast that an additional 20 million Nigerians may slide into poverty by 2022. Abdulwahab Isa, in this report, outlines new measures to hedge rising poverty level
Excruciating poverty level is the root to everything ailing Nigeria. To assert that Nigeria swims in poverty is a fact checked statement. The menaces sketching around as kidnapping, banditry, armed robbery; insurgency and others blowing around Nigeria’s landscape are manifestations of a deepening poverty level. By extension, these vices fuel the current insecurity; the near absence of safety for most Nigerians. A country replete with high income inequality, long-term ethnic conflict; civil unrest and corruption is bound to reap from bad vices. For the umpteenth time, the World Bank, in latest report released last week, forecasts more Nigerians risk heading into to poverty zone unless the state adopts quick remedial measures. Every successive administration never shies away from putting poverty and its attendant effects on a front burner. Every government has one or several policy initiatives designed to cushion poverty.
Grim macro-economic outlook
Nigerian Economic Summit Group (NESG) a reputable thinktank body raised the red flag about impending burgeoning poverty level. At the launch of its 2021 Macroeconomic Outlook in conjunction with World Bank, NESG predicted a likelihood of 15 million more Nigerians plunging into poverty unless steps are taken to reverse the current trend.
At the forum conducted virtual, the World Bank said its estimates showed between 15 million to 20 million Nigerians would join the poverty rank by 2022. This figure is scary considering that Nigerian government is wrestling poverty without headway.
The government had yet to make meaningful progress in her poverty decimation policy, which projects to lift 100 million Nigerians from poverty in the next 10 years. Speaking at the launch, World Bank Senior Economist, Gloria Joseph-Raji, recalled negative impact of Covid-19, which she admitted hit the Nigerian economy very hard.
The impact of Covid-19 on Nigeria pushed her economy into deepest recession, the worst since 1980s and the second in five years. According to her, Nigeria needs to push forward policies that help to improve the business environment and improve the welfare of the average Nigerian.
“We actually consider Nigeria right now to be at a critical juncture in the sense that the achievement of its development goal of lifting 100 million people out of poverty by 2030 was already challenging even before COVID-19 struck, and then COVID-19 has made this even more challenging and more urgent.
“So, with lower growth and fewer jobs, and then coupled with high inflation, our estimates are that the number of the poor will increase by about 15 to 20 million people by 2022 from the about 83 million people in 2019. And the 2019 numbers are from the Nige-ria Living Standards Survey of 2018/2019,” she said. Joseph-Raji noted that the authorities had risen to the occasion and had taken some bold reforms in order to respond to the crisis. She noted that government adopted reform measures to reflect market based reality.
This includes adoption of market-based mechanism for petroleum pricing and adjusts electricity tariffs to more cost-reflective levels in order to free up fiscal resources. However, the World Bank official said key priorities for the government include adopting more transparent and credible foreign exchange allocation, mobilizing tax revenues in a way that does not negatively affect investments and growth, strengthening the management of monetary policies towards the primary objective of price stability.
“The outlook is very uncertain, and there is a need for the government to prioritise certain key policy reforms if Nigeria must really turn the corner and recover and rebuild resilient and inclusive growth,” she said. Renowned Economist, Dr. Doyin Salami, in his contribution, urged to commit more into investment to spur growth.
“If the economy is going to grow and people are going to feel it, then it is pretty clear that output growth must not only be rapid. We really do need to find ourselves in a position where this economy is growing at about six per cent, and to move in that direction requires significant investments,” he said. Beyond working to exit recession first quarter 2021, a goal the Federal Government is assiduously working to achieve, Salami said government must project beyond ending recession.
Evaluating FG’s efforts:
Endemic poverty level is responsible for most of the vices destabilising Nigeria. The government recognises it, and it initiated various policy measures to address it. A declaration by the current administration to lift 100 million people from poverty level in the next 10 years is tailored to addressing rising poverty level in the country.
The Central Bank of Nigeria initiated various policies, all geared to engage unemployed youths, and equip them with sources of income. The Anchor Borrowers’ Programme, NIRSAL AGSMEIS loan of N10 million maximum for starters for entrepreneurs, several Covid-19 house hold loans; the grants and assorted financial palliatives rolled out to neutralise impact of Covid-19 on people’s income are geared to scale down poverty level in Nigeria.
Ironically, the poverty line gets deeper, notwithstanding the amount of fund government continues to push out to decimate and reduce poverty in the country. Some school of thoughts offered perspective as to why no reasonable progress is attained. One of the reasons cited is that, most of the funds meant to empower less endowed people never get to them.
Imperative of FG, state collaboration
Both federal and states have policies for tackling poverty. Each tier of government pursues its poverty reduction programme independently. There is need for collaboration, comparison between states and the government at the center to achieve remarkable success.
To fill the gap, and work in unison, policymakers at both federal and state levels should unanimously resolve to synergise to stamp out poverty across the country. The resolution was reached at a virtual extra-ordinary meeting of the Forum of Secretary to the Government of the Federation and Secretaries to State Governments that held last week. Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, underscored the need for a working partnership between sub-national government and the ministry in the bid to achieve the feat.
The meeting themed: “Strengthening National Poverty Eradication Strategies and Policies’ was targeted at effectively coordinating poverty eradication programs in Nigeria using a single document in all the states of the federation. In her presentation, Farouq emphasised that poverty remained the number one challenge in the country, hence the need to coordinate and synchronise effectively, all programmes aimed at eradicating poverty in Nigeria. “A careful evaluation of all major programmes and projects of government since independence on poverty reduction, alleviation and eradication show that there is a need to harmonise and rationalise intervention strategies and their implementation which will lead to an environment where all programmes are centrally coordinated and monitored with a view to making the overall impacts transparently felt by all Nigerians.
“Though many actions were taken to address this in the past, the 2018/2019 Poverty and Inequality data in Nigeria, as released by the National Bureau of Statistics shows that the range of poverty headcount is between a high of 87.3 per cent in Sokoto State to a low of 4.5 per cent in Lagos, with a national average of 40.2 per cent.
“This alarming situation and the strategic need to address it is the primary reason why the administration of President Muhammadu Buhari established the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development to provide national coordination, strategies and policies for intervention.
Tips to tackling poverty by NESG
The NESG last week proffered solutions which it urged government to adopt in tackling poverty and growing the economy in 2021 and beyond. The recommendation by NESG was outcome of its joint forum with the World Bank. NESG Chairman, Asue Ighadolo, said the body proffered four key priorities areas the government would need to pay attention to ensure economic recovery, growth and sustainability in 2021 and beyond. Apart from deliberate policies to achieve macroeconomic stability as well as ensuring policy and regulatory consistency, the NESG called on the government to carry out reforms in the key sectors of the economy and human capital development. The recommendations were contained in its special publication on the Nigerian economy, “2021 NESG Macroeconomic Outlook.” The body called on government to prioritise creating employment opportunities.
NESG and World Bank have raised fresh alarm on impeding imploding poverty level by 2022. All hands across three tiers of governments must work in sync to avert additional add to current poverty level.