• Friday, March 29, 2024
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Nigeria dithers as strict reforms lift millions out of poverty in China, India

poverty-Nigeria

China and India, two of the world’s most populous countries, have been able to cut down by more than half the number of their citizens living below the poverty line, despite having five times Nigeria’s population.

China has a population of 1.4 billion while India’s population is put at 1.3 billion as at April 9, 2019, according to data from Worldometers, a World Bank data clock that tracks population across countries. These compare with Nigeria with an estimated population of 199 million.
Both China and India were able to reduce poverty through strict policy reforms, especially by developing a robust health and educational system.

“Both countries took a bottom-up approach to achieving inclusive growth and development,” said Aminat Olayinka Olohunlana, a financial, economic and public policy analyst at the University of Lagos.

“Education was massively invested in, business environment was conducive, investment climate was well developed and infant industries were protected,” she said.
Furthermore, there was a shift from a traditional-based ideology to a knowledge-based economy that made these countries start to invest in their intellectual capital, she added.

Ayodele Akinwunmi, head of research at FSDH Merchant Bank, said China and India undertook a lot of reforms in education and health to ensure that the rate of poverty came down in both countries.
“Today, when people talk about the treatment of diseases, they go to India for surgical operations and for remedy of any form of ailment. They also took time to bring about financial inclusion by providing credit to people at the bottom of the pyramid,” Akinwunmi said.

But while the number of people living in extreme poverty has reduced in China and India, the reverse has been the case for Nigeria, Africa’s top oil producer, where extreme poverty grows by six people every minute, according to a recent report by The Brookings Institution.
Nigeria overtook India as the world’s poverty capital at the end of May 2018, with 87 million of its people, representing about 43.5 percent of its entire population, living below $1.9 per day compared with India’s 73 million or 5.1 percent of its population. 
Experts say it could get worse unless something dramatic happens, given that the country’s population has been tipped to hit 410 million by 2050, according to United Nations estimates.

Nigeria, Africa’s most populous nation, has yet to take the bold step to initiate badly-needed reforms. The country’s President Muhammadu Buhari had in his “Next Level” document prior to the general elections this year pledged to continue working out structural policies encapsulated in the Economic and Recovery Growth Plan (ERGP) that will help fix the fragile state of the economy that has been predicted by the International Monetary Fund (IMF) to grow by 2.1 percent in 2019.
While the 76-year-old president, who defeated his main challenger and candidate of the People’s Democratic Party (PDP), Atiku Abubakar, in a keenly contested presidential election on February 23, has embarked on major reforms in the commercialisation of gas flaring, he has held his ground in maintaining an unsustainable oil subsidy that cost the country as much as N730.9 billion in 2018, according to data obtained from the financials of state-owned oil firm NNPC.

This amount, analysts say, could have gone a long way if it were channelled into funding the educational sector and providing basic health-care services as both sectors have been starved of funds by both the government and banks.
Poverty started to deepen in Nigeria at the time of the 1970s oil-price boom that propelled it into the ranks of Africa’s wealthiest countries. As the elite grew richer through patronage networks in the petroleum industry, successive military and civilian governments neglected agriculture, manufacturing and education. 
Real annual per-capita income fell from $264 to $250 between 1970 and 1999 despite an estimated $230 billion in oil revenue, according to a study prepared for the UK Department for International Development.
Today, Nigeria ranks 157 out of 189 countries in the UN Human Development Index, which measures indicators such as health and inequality. Life expectancy is still only 54 years, although that’s an improvement from 46 years in 1999.

The IMF in its 2019 Article IV Consultation on Nigeria noted that growth in Africa’s biggest oil economy is too slow to lift its populace above the poverty clock. The global lender also recommended an increase in oil and power tariffs as well as the scraping of multiple exchange rates that are stalling investments.
“Above all, a functional institutional framework is key for achieving the highlighted approach to inclusive development. If Nigeria is to be uplifted from its present disheartened condition, the highlighted approaches should be embraced with all seriousness,” Olohunlana told BusinessDay on phone.

“Increasing population is not a condition for extreme poverty,” she added.

 

MICHAEL ANI