Nigeria slipped into infamy in June by being named the poverty capital of the world, a tag previously worn by India. The report by the Brookings Institute, drawing its data from the World Poverty Clock, shows that Nigeria now has over 87 million of its citizens living in extreme poverty compared to India’s with just 73 million. But whereas, India, with a population of 1.35 billion, has continued to see a rapid decline in the number of its population leaving under extreme poverty, Nigeria, with just a population of under 200 million, has continued to see its desperately poor population rising at an alarming rate. According to the report, extreme poverty is growing by six people every minute in Nigeria while poverty in India continues to fall.
This is not too dissimilar from the report of the National Bureau of Statistics, which, in 2016, estimated that over 70 percent of Nigeria’s population then (112 million) live below the poverty line.
Although the Buhari administration has continued to operate in denial of the reality of the growth of extreme poverty in Nigeria, it is clear from the indications and economic indices that Nigerians have never been this poor and desperate since independence. And make no mistake about it, the poverty problem in Nigeria is directly a result of the nebulous and ill-intentioned economic policies the Buhari administration has pursued, which have squeezed enterprises and even more, citizens, have seen their real income more than halved in a twinkle of an eye and prices of food, goods and services skyrocket beyond the reach of most Nigerians.
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The problem started shortly after the president took over in 2015. His ascension of office was followed with a groundswell of optimism and the markets reacted appropriately hoping the president would urgently roll out the promised market reforms and provide direction for the economy. But the president did nothing, allowed the economy to continue to drift without any direction or leadership whatsoever and when the tides began to turn and the markets started reacting appropriately, the administration rolled out a series of damaging command and control policies which sought to controlthe foreign exchange market and the economy. The effect was that foreign investors were forced to repatriate their investments and halt new ones, resulting in a crippling foreign exchange scarcity that led to severe job losses, hyper inflation, and severe dislocations in the economy.
But despite these clear evidences, the government continued to live in denial, choosing to blame the past administration for the economic downturn and recession it directly caused.
What is more, the administration’s import substitution policies that have seen it ban the importation of some agricultural products and food in preference for promoting local production has been one of the leading factors increasing poverty in Nigeria.
The world over, the standard means of lifting people out of poverty is ensuring that their disposable incomes are enough to buy them food and other necessities. So, governments that have successfully lifted most of their people out of poverty do cash transfers to their poorest or ensure the prices of foods are especially low so that the poor could be able to afford them.
But Nigeria is not only discouraging free trade, which has the capacity to lift people out of poverty, but is encouraging monopoly and the flourishing of inefficient local industries that exploit the poor by unnecessarily raising food prices. Take for instance the unwise decision to ban the importation of rice into the country to encourage local rice producers. The result has been the skyrocketing of the prices of local rice, which is way beyond the reach of most of Nigeria’s poor. What is more, most consumers have continued to shun local rice because of its low quality compared to imported ones. No wonder the smuggling of rice from across the border is rife. And to show the government is hell-bent on increasing the misery of the poor, it is succumbing to the demands of the Nigerian rice cartel to shut the borders and employ drones to monitor and totally stop the import of rice into the country to allow the cartel the freedom to continue to squeeze the poor out of existence.
No serious government that wants to address poverty will at the same time be encouraging or supporting monopolies in food production that always results in higher prices of food for the poor. No wonder an OECD report on Nigeria avers that “Nigerians would save 30% of their income if they bought their food at Indian prices.”
For the country to make any progress on poverty alleviation, the government needs to accept the realities on the ground and begin to fashion policies that not only tackle the fundamental reasons why poverty is spreading at an alarming rate, but ensure productivity and competitiveness.
