Experts have urged countries like Nigeria to understand the importance of the Multidimensional Poverty Index (MPI) in tackling the root cause of poverty.
According to the World Bank, the pandemic has pushed 100 million people into extreme poverty. For Nigeria, it has pushed the number of poor people from 83 million to 90.1 million, and that number is expected to increase by 11 million by 2022.
Experts from Citibank, one of the world’s largest financial institutions said in their report titled ‘Eliminating Poverty: The Importance of a Multidimensional Approach in Tackling SGD 1, that in accessing poverty, using the one-dimensional, linear approach, especially, the World Bank’s International Poverty Line (IPL) of $1.90 per day is beyond being potentially misleading, but does not provide any idea of how a person is poor, or to what extent.
“One of the problems of using that metric is that it does not tell us how poor people are, how and in what ways they are deprived in terms of education, health, the standard of living, nutrition, housing, access to good health care, water, electricity, asset ownership, etc.,” Jason Channell, the global head of sustainable finance, Citi Global Insights said in a presentation of the report.
Channell also added that the benefits of using the MPI to assess poverty are that it provides greater insights into how poor people are, and in what ways they are experiencing poverty.
“This allows us to target programmes to eradicate poverty, measure, and report on progress, and raise and target capital appropriately and provide impact for investors,” he said.
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The report represents an exciting collaboration between Citi and SOPHIA Oxford, which was formed by Oxford University as a not-for-profit partner of the Oxford Poverty and Human Development Initiative (OPHI).
The MPI is a measure that captures deprivations in various dimensions for example child mortality, nutrition, years of schooling, enrolment, water, sanitation, electricity, cooking fuel, floor, assets, etc.
Philip Brown, head of public sector debt capital markets at Citi Bank noted that people are yet to see anybody address the thirst that investors have for the details of how the proceeds of financing is also changing people’s lives.
“There is a tremendous appetite from investors regarding this information. Investors would want to have an instrument like the multi-dimensional programme developed by Citi to allow them to see and measure the programs that they are financing,” he said.
Looking at some of the dimensions of MPI such as access to Food, health and education, Africa’s biggest economy lacks these. For example, Nigeria has one of the highest maternal and child mortality rates in the world and the highest number of children out of school.
“Eliminating poverty is not just a moral duty. It is also a financial and social opportunity. Aggregated investment opportunities running up to $1.6 trillion per year can offer economic multiplier effects of 5x plus, and allow the trillion of dollars of ESG- focused capital that wants to invest sustainability to be deployed, all while improving the lives of millions,” Channell added.
