• Saturday, May 18, 2024
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National poverty reduction with growth strategy: Serious or business as usual?

poverty in Nigeria

In early May, the Federal Executive Council (FEC) approved the National Poverty Reduction with Growth Strategy (NPRGS), a program designed by the Presidential Economic Advisory Council (PEAC).

The NPRGS is a poverty alleviation program created to achieve the President’s ambitious plan of lifting 100 million people out of poverty within 10 years. The program, through economic growth and social protection programs, would help accelerate poverty reduction.

In 2019, during the President’s speech on Democracy day (June 12), he made an ambitious pronouncement, declaring he is working on lifting 100 million Nigerians out of poverty as he aims to remove the title of poverty capital of the world from Nigeria.

Evaluating the NPRGS content, the program is built on four core pillars. These include Macroeconomic stabilisation, Industrialisation for Economic Growth and Transformation, Structural Policies and Institutional Reforms, and Redistributive Policies and Programs. The programme assumes a gradual annual growth of GDP from 2.3 percent to 4.4 percent during 2019-2024, and 6 percent per annum during 2025 to 2030.

During the period, the annual average reduction in poverty is projected to be around 11.2 million per annum, 80 percent of which will be in self-employment, and 20 percent in wage-paying jobs. Redistributive and transfer programmes, which target the ultra-poor, include vocational skills, MSMEs support, and livelihood diversification programmes. The education and skills embedded in these programmes are expected to provide the exit routes for the extreme poor into the mainstream economy by 2023. In addition, the poverty gap between the North and the South is expected to narrow, as access to education, health, and qualitative standard of living is ramped up nationally and in the North in particular.

The document further elaborates on how the various policy pillars will be achieved. For example, the macroeconomic stabilisation pillar will be driven by exchange rate unification, single-digit inflation, gradual phase-out of subsidies, sustainable public debt level, etc.

The total cost of the execution and implementation of the policies and programmes underpinning this strategy is estimated at US$1.6 trillion over the 10-year period (2021-2031), giving an annual average of about US$161 billion. This estimated cost covers the dual objective of lifting 100 million Nigerians out of poverty as well as of achieving all the country’s development objectives in line with the Sustainable Development Goals 2030.

As a middle-income country, around 50-60 percent ($80b – $97b) of financing needs is expected to be covered by the government. The challenge, however, is that in the recent past, specifically in 2020, the total consolidated national budgetary resources (federal and state governments) was only around $54 billion.

Noteworthy to mention, about 86.9 million Nigerians are living below the National Poverty Line, with Nigeria carrying the unenviable title of “poverty capital of the world”. Thus, we reckon the Federal Government (FG) can no longer afford to pay lip service to the topic of poverty alleviation in Nigeria, particularly with the unabating social restiveness in different parts of the country. Thus, question marks remain on FG’s willingness and capacity to implement this plan effectively and efficiently. That said, we choose to remain pessimistic on the possibility of fulfilling the policy objectives given the FG’s history of ambitious plans and underwhelming implementation, an acute case of consistently playing to the gallery.