President Muhammadu Buhari ’s much anticipated inaugural speech finally came during the June 12 Democracy Day celebration in Abuja. It left in its wake serious debates, particularly regarding his promise to lift 100 million Nigerians out of poverty in the next ten years. Reducing poverty is easier said than done. On current evidence, Buhari and his top aides require sound planning on a scale and speed never before seen in Nigeria if they are to record successful poverty reduction outcomes in the medium to longer-term horizon.
Putting poverty reduction at the heart of the government’s policy agenda is the right thing. Nowhere is this more urgent than in Nigeria, where currently more than half of the population lives in extreme poverty (defined as living on less than USD 1,90 a day). It is also in line with Goal 1 of the Sustainable Development Goals (SDGs) to ‘eradicate extreme poverty for all people everywhere’.
A quick look at the numbers and Nigeria’s current development trajectory reveals that Buhari’s promise is overly ambitious not to say entirely unrealistic.
About 108 million Nigerians live in extreme poverty, sixteen million more than in 2015 when
Buhari was elected president for the first time and 37 million more than in 2003. On the country’s current trajectory, close to 130 million Nigerians are expected to live in extreme poverty in the next decade, according to the International Futures system (IFs), an integrated modelling platform housed at the University of Denver. This is 22 million more than today. This implies that Nigeria is not on track to meet Goal 1 of the SDGs by 2030,.
So, how exactly will Buhari’s government radically reverse this trend? Can Nigeria indeed do what China, India and Indonesia did by dramatically reducing poverty in a time span as short as 10 years as the President suggests?
According to Buhari, his administration is mapping out policies to ensure that Nigeria grows by 2.7 per cent in 2019. The most recent growth projection from the International Monetary Fund for Nigeria this year is about 2.1 per cent.
Even if Buhari’s highly optimistic projection holds, this will roughly keep Nigeria on its current economic growth trajectory. Relative to the size of Nigeria’s poverty challenge, this will still be underwhelming achievement to say the least, and to be sure, will not lift 100 million Nigerians out of poverty in the next ten years. China’s and India’s phenomenal successes in poverty reduction were anchored in much higher economic growth sustained over years if not decades.
Between 2002 and 2012, China lifted about 325 million people out of extreme poverty; and between 2004 and 2014, India reduced its number of extremely poor people by 200 million.
Which is why unsurprisingly, India surrendered the unenviable lead to Nigeria as home to the largest number of poor people in the world. During their respective poverty-reducing decades, both China and India grew at an average annual growth rate of 11.5 and 8.4 per cent respectively. And even Indonesia’s economy expanded at an average annual rate of 3.5 per cent between 1998 and 2008, which allowed the country to free over 80 million people from the most abject form of poverty.
Nigeria’s economy, on the other hand, is not growing fast enough to make such significant strides in poverty reduction. Further, evidence from around the developing world shows that economic growth is a necessary but insufficient condition to sustainably reduce poverty. The nature of the growth matters, and so does income inequality which is high in Nigeria and has typically excluded the poor from reaping benefits from growth. Nigeria’s income inequality is also higher than China, India or Indonesia’s when those countries made major strides in rolling back poverty.
Another key obstacle to poverty reduction is Nigeria’s extraordinary fast population growth which has been outpacing economic growth. Unlike President Buhari suggestion in his speech, Nigeria’s population dynamics differ greatly from China or India’s. Over the past twenty years, Nigeria’s population has grown by close to 70 per cent, from about 116 million people in 1998 to more than 195 million people today. By 2030, more than 260 million people are expected to live in Nigeria, of which close to two thirds are likely to live in towns and cities. At present, Nigeria’s population is growing almost four times as fast as that of China in 2002 and about twice as fast as India’s in 2004.
Buhari’s administration needs to set more realistic targets if it does not want to set itself and Nigeria up for failure. A target as ambitious as lifting 100 million people out of poverty over the next 10 years would require radical policy shifts on multiple fronts which do not seem likely or realistic given recent records.
Radical policy shifts can significantly increase Nigeria’s chances to reduce poverty significantly. Among these is a need to stimulate the economy, including via aggressive infrastructure investments (both public and private), labour-intensive manufacturing and agro-processing.
Managing population growth via family planning initiatives and improved access to contraceptives and female secondary education will help. Just as important, better governance will enhance the ability of the government to effectively formulate and implement sound policies.
President Buhari is right that leadership and a sense of purpose matter. However, visions need to be underpinned by thoughtfully integrated long-term planning. Else, failed implementation remains a distinct risk. Targets should be ambitious whilst being realistic. Just as historical examples from elsewhere need to be interpreted in context. There is much that the Buhari administration can do to reduce the burden of extreme poverty for Nigerians. Taking planning to the next level would be a good start.
Julia Bello-Schünemann
• Julia Bello-Schünemann, Senior Associate, Good Governance Africa (GGA-Nigeria)
