Nigeria received yet another blow as the number of its citizens living in extreme poverty became higher than that of India in 2018, as compiled from World Data Lab, a predictive analytics social enterprise.
The number of Nigerians living in extreme poverty crossed the 83 million mark in 2018, surpassing India’s number of extremely poor at 73 million. This means that almost one out of every two persons living in Africa’s largest economy is now living in extreme poverty.
This is despite India having more population at 1.35 billion than Nigeria at about 200 million people.
Kristofer Hamel, Chief Operating Officer of World Data Lab said “At the end of May 2018, our trajectories suggest that Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million. What is more, extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall,” Hamel said in a statement.
Meanwhile, UN Department of Economic and Social Affairs projects Nigeria to be the world’s third most populous country by the year 2050.
Ayodeji Ebo, MD of Afrinvest Securities limited said, “Currently, we are growing at 1.95 percent with a population growing at 2.6 percent per annum. Our growth rate is not exceeding the population growth rate. So as we progress, our standard of living will be impacted negatively.”
On the reasons why Nigeria now has the highest number of extremely poor people after India, analysts cited lack of social amenities, unemployment, high dependency rate, security challenges, lack of right economic policies and reforms.
“Nigerians becoming poorer could be as a result of key indicators like access to amenities; health, housing, food. These are the things you should look at and if we are not able to have access to these things, we can get poorer,” Ayo Akinwunmi, Head of Research FSDH Merchant Bank said in a telephone response.
Nigeria’s current housing deficit is estimated at17million, and the country is seeking to improve access to home loans in an economy that vies with South Africa as the continent’s biggest. A lack of proper land deeds, poverty and record high interest rates means there are only an estimated 50,000 registered mortgages, of which state-owned Federal Mortgage Bank of Nigeria accounts for 18,200, according to Ahmed Musa Dangiwa, Chief Executive Officer of the bank. On the health sector, each Nigerian gets N1, 800 for medical provision as obtained from the N340 billion budgeted for the health sector in 2018.
Meanwhile, the World Health Organization (WHO) during the BAMACO initiative agreed that health care expenditure to GDP should be up to 15 percent. This Nigeria lags with estimated health budget allocation of 3.9 percent of its total budget.
This is far lower than South Africa’s 2018 estimated health expenditure of $14 billion, 12 percent of its total budget. The NBS latest report for conflict and food insecurity in Nigeria for the year ended 2017, revealed 79 percent of households in the North east region of the country had food insecurity.
In the North central region food insecurity of household was at 71 percent while 74 percent of households in the South south region were in the same situation for the period under review. Most analysts pointed to the insecurity issues resulting from the Fulani insurgency and the attacks by Boko Haram as a major issue.
Since 2013, the Movement Against Fulani Occupation, MAFO, and the Benue state government has carefully documented over 60 attacks against farmers and residents of the state by Fulani pastoralists with over 1,800 people killed, thousands more injured and over 108, 500 displaced from their homes with more than 175, 000 registered in eight internally displaced people’s camps in the state.
“If you look at Nigeria today, between now and the last one year, it seems the proportion of people who do not have access to these things are increasing, unemployment rate is quite high, and dependency rate is also a bite higher. People are not able to send their children to school, people that were able to do that before are now withdrawing from schools. Farmers are being displaced day in and day out,” Johnson Chukwu, MD of Cowry Asset Limited said, explaining the reasons that could have led to Nigerians having more poor people than Indians.
The unemployment rate in Africa’s largest economy is one of the highest in the continent at 18.8 percent as at the third quarter of 2017. Also about 15.99 million of the inhabitants of Africa’s most populous nation are currently unemployed, as compiled from the nation’s bureau report.
Meanwhile, Nigeria has a minimum wage of N18,000 that has remained unchanged since it was moved by 140 per cent from N7500 to N18000 by the Goodluck Jonathan led administration in 2011.
Illiteracy rate in the country is also one of the highest among its peers at 34.9 percent.
“The government needs to rethink its economic strategies and adopt policies that will attract both local and foreign capital into strategic sectors of the economy to improve the country’s competitiveness and productivity. Such initiatives will include opening up the infrastructure sector to private capital, improving access to capital in terms of availability and cost as well as addressing the energy supply crises,” Chukwu said.
While India is seen to have undertaken tough policy choices, Nigeria has struggled to take definitive action.
The Indian government has come up with several programmes in order to ease the burden of poverty in the country. The Pradhan Mantri Jan Dhan Yojana (PMJDY) is one such programme. It looks to provide economically-disadvantaged people access to different financial services such as a basic savings account, insurance, credit as and when needed, pension and remittances.
On what Nigeria can learn from India in order to make progress, “there is the need to take a long-term approach to implementing reforms rather than always applying short fixes,” one government source with knowledge of the matter said on condition of anonymity.
According to World Data Lab report, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today and the Democratic Republic of the Congo could soon take over the number 2 spot, leaving India to occupy the third position.
While in another study by the world bank, it revealed that nearly 70 percent of the world’s population live in just five countries, those of whom are subsisting on less than $1.25 a day and are concentrated in five areas which are India, China, Nigeria, Bangladesh and the Democratic Republic of Congo.
“The difference is that if you look at china and India, these countries are doing a lot to pull people out of poverty. For instance, China within the last 30 years has pulled more than 500 million people out of poverty. India in the past ten years has done a lot to reduce the incidence of poverty in their country,” Chukwu of Cowry Assets added.
The Lagos-based CEO said unfortunately, both Nigeria and Congo are on the opposite side of development in the sense that their poverty level are worsening. “We are seeing poverty levels in Nigeria increase as GDP per capita is deteriorating.”
The World data lab report also explained that Africans account for about two-thirds of the world’s extreme poor and that if current trends persist, Africa will account for nine-tenths by 2030.
“Fourteen out of 18 countries in the world where the number of extreme poor is rising are in Africa,” Hamel of World data lab cited.
The increasing poverty rate in Nigeria also corresponds to the recent International Monetary Fund (IMF) forecast, where it said Africa’s largest economy per capita income will further decline till 2023.
This is a painful squeeze for Africa’s largest economy as its per capita income has consistently been on the decline for three consecutive years (2015-2017).
According to BusinessDay analysis of IMF per capita income data, Nigeria’s per capita income rose from $2,365 in 2010 to $2,582 in 2011 and further rose to $3,268 in 2014. Thereafter, it trended downward to $2,763 in 2015.
By 2017, Nigeria’s income per capita fell by 10.7 per cent to $1,994 from $2,207 recorded in 2016.
On how Nigeria can curb the rising poverty rates in the country Chukwu of Cowry Asset said “the government should take immediate measures to address the internal security situation in the country, reduce the level of corruption and improve the efficiency of the legal system amongst other immediate measures that are necessary to make the Nigerian economy an attractive destination for capital and investments”.
Akinwunmi of FSDH said the way to go is by providing enabling environment that will enable companies to expand.
“If it takes government to swallow their pride to allow foreign investors build roads, infrastructure, and so on to ensure that our environment is business friendly that will enable people to employ youths, they should allow it,” he concluded.
