• Wednesday, July 24, 2024
businessday logo

BusinessDay

Economic growth not sufficient to end poverty, World Bank warns

businessday-icon

 

Persistent unem¬ployment and high poverty levels will not end just because countries like Nige¬ria are recording high eco-nomic growth rates, World Bank warned yesterday.

This warning comes espe¬cially for a country like Nige¬ria which, with a GDP size of about $510 billion is now the largest economy in Africa and the 26th globally, but regrettably habours as much as 7 percent of world’s global poor, according to World Bank figures yesterday.

In a paper it released to formally kick-start the 2014 Spring meetings which it is jointly hosting with the Inter-national Monetary Fund (IMF) in Washington DC, the World Bank insists that much more than growth, what is even necessary is the per capita in¬come of citizens which shows the level of equality and inclu¬siveness of such GDP.

The Brentwood Institu¬tion notes that while eco¬nomic growth remains vital for reducing poverty, growth has its limits, as it advised countries to complement ef¬forts to enhance growth with policies that allocate more re¬sources to the extreme poor.

Nigeria’s rebased figures pushed up GDP size some 89.22 percent in 2013, plac¬ing the economy of the rich oil first, ahead of South Af¬rica with current GDP of about $384.3 billion.

But Nigeria’s unemploy¬ment is still quite high at 23.9 percent while poverty has soared to as high as 60 percent, and had helped fuel insurgence in the country.

The World Bank further notes that growth alone is unlikely to end poverty by 2030 because as extreme poverty declines, growth on its own tends to lift fewer out of poverty. And, according to the bank, this is because, by this stage, many people still in extreme poverty live in situations where improv¬ing their lives is extremely difficult.

“Economic growth has been vital for reducing ex¬treme poverty and improv¬ing the lives of many poor people. Yet, even if all coun-tries grow at the same rates as over the past 20 years, and if the income distribution remains unchanged, world poverty will only fall by 10 percent by 2030, from 17.7 percent in 2010.

“This is simply not enough, and we need a laser like fo¬cus on making growth more inclusive and targeting more programmes to assist the poor directly if we’re going to end extreme poverty, Jim Yong Kim, World Bank Group pres¬ident, said in the paper.

Kim further suggests that “to end extreme poverty, the vast numbers of the poorest – those living on less than $1.25 a day- will have to de¬crease by 50 million people each year, until 2030.

“This means that 1 mil¬lion people each week will have to lift themselves out of poverty for the next 16 years. This will be extraordi-narily difficult, but I believe we can do it”, Kim added.

But the World Bank be¬lieves that tackling poverty would require first of all, un¬derstanding where the great¬est number of poor people live, while at the same time also concentrating on where hardship is most pervasive.

This, it said, entails con¬certed efforts in countries where large numbers of the world’s 1.2 billion poor live.