Hailemariam Desalegn, former Ethiopian Prime Minister, has said that Nigeria must target investments in rural areas and agriculture to fight its alarming poverty rate.
The former prime minister, who said this at the ongoing NES27 panel discussion, said that the poverty rate in Africa’s most populous country has remained within the threshold of 40percent since 1990, an indication that efforts at tackling poverty have had little impact.
“In 1990, Nigeria’s poverty rate was 43 percent and currently it is at 41percent. After 30 years it is still within the range of 41 and 43 percent. Meaning it is declining at a very slow rate,” he said.
He advised the Nigerian government to look at what went wrong in the 30 years that it is unable to drive a significant reduction in its poverty rate.
“We need to have a continuous policy and national consensus on where Nigeria has been and where it should be,” he said.
“Most countries in Africa have a poverty rate of 30percent. So, for a country like Nigeria, it should be much lower,” he further said, due to the size of its economy and population.
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He said to drive inclusive growth, Africa’s most populous nation must focus on areas it has a comparative advantage – which he identified in rural areas and agriculture.
“Nigeria needs to be grounded in areas it has a comparative advantage before we can talk about industrialization and manufacturing,” Hailemariam said.
Nigeria has slummed into two recessions in the past five years owing to the collapse in oil prices and disruptions caused by the Covid-19 pandemic. The contractions have weakened consumers’ purchasing power.
According to data from the NBS, headline inflation, which serves as a measure of consumer prices, rose by 16.6 percent in September 2021 while Nigeria’s unemployment rate came to 33.3 percent in 2020, as more people were rendered jobless from the impact of the pandemic.
Also, the World Bank stated in a Development Update report that the country’s surging inflation rate has pushed seven million Nigerians into poverty.
According to the report, before inflation started rising steadily, there were 82.9 million poor Nigerians but the number has risen to 90.1 million as a result of the price shock.
“Areas with high poverty rates are located in rural communities. So, if you don’t see your comparative advantage, you will lose it,” he said.
He stated that the private sector cannot invest in rural communities because it is not profitable. He then urged the states to increase investments in rural communities to drive inclusive growth.
