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OPINION: NIGERIA’S HORRIFYING POVERTY RATE

THEWILL APP ADS 2

We must not be surprised that the National Bureau of Statistics has estimated the multiple dimensional poverty Index in the country at 133 million persons representing 65 per cent of the population of Nigerians. This data I suppose simply confirms what most of us already feel and suspect.

My position on the reliability of the index is that we should imbibe the habit of cutting national institutions charged with such specific responsibilities of producing targeted index slack by giving them the benefit of the doubt. We should expect them to be professional in discharging such assignments as there will be no reasons whatsoever for it to be otherwise. Therefore, there is no need to argue with the figures and the major centres of poverty in the country as highlighted in the Report which included Sokoto, Jigawa, Yobe and Bayelsa states .

The reason for this situation is not farfetched. It is directly due to lack of productivity in the economy. All it takes is to remember that the official data on Gross Domestic Product (GDP) is under 3% per annum. When your population growth rate is higher than your GDP rate as a nation you are on the highway to entrenching poverty in the land.

The reasons why we don’t have productivity in the economy are well rehearsed. It is partly historical even if it got compounded by untoward contemporary developments: COVID-19 as well as the senseless ongoing Russia-Ukraine war.

Historical causes are largely due to what has been commonly referred to as the “Dutch Disease.” This is a situation whereby countries with natural endowment underperform because of unwholesome dependence on resources from this one source. In Nigeria we were somehow conscious of this fact that as far back as 1986, we articulated the Structural Adjustment Program (SAP) which had the sole thrust of diversifying the economic base of the country so that revenue would also accrue from non-oil sources. But despite an expertly articulated program, we came badly short on implementation and that really is the long and short of the problem. Today we all collectively bemoan our failure in this regard.

The other area of problem we had was wrong policy choices. We have natural endowment in fossil fuel but lack the capacity to refine what we consume. We literally imported all the refined products we consumed and ended up not recovering the cost of importation over many years. The subsidy we paid ballooned out of hand as it became a cesspool for unbridled corruption. In summary this explains why productivity has eluded us as a Nation amongst other off shot; related reasons.

There are also those who think that we should have floated the Naira to allow the exchange rate to be determined by the market. But the fundamental problem is that you don’t have a market in this respect in the country. What sort of market is that where you only have one dominant supplier with insatiable volumes of demands? And for those of us who have been around for some time, there is no manner of experimentation that we have not tried, only to beat a retreat as the reality of free falling rate of exchange stares us in the face. No doubt floating the Naira is on the cards as soon as we are in a position to drastically reduce demand through for instance the termination of fuel importation.

What to do is well known. We just need the political will to actualise the strategies we have dutifully identified. We hope that elections 2023 will unleash the much anticipated change in paradigm. This change we all await must enthrone nascent pristine values that will make our leaders selfless as they eschew corruption in all its ramifications as the future of the country is prioritised as they pilot National affairs.

*** Written by Dr Boniface Chizea, an economist and CEO, BIC Consulting.