The World Bank said on Wednesday that Nigeria with a poverty rate of 39.1 percent has the largest poor population (79 million extreme poor) in sub-Saharan Africa, accounting for 20 percent of the total poor in the region.
The Washington, D.C., United States-based international financial institution said this in its biennial Poverty and Shared Prosperity Report released on Wednesday, October 7, 2020.
Almost half of poor people in Sub-Saharan Africa live in just five economies: Nigeria (79 million), the Democratic Republic of Congo (60 million), Tanzania (28 million), Ethiopia (26 million), and Madagascar (20 million).
Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the COVID-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress, the World Bank said on Wednesday.
The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction. Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1% and 9.4% of the world’s population in 2020, according to the biennial Poverty and Shared Prosperity Report. This would represent a regression to the rate of 9.2% in 2017. Had the pandemic not convulsed the globe, the poverty rate was expected to drop to 7.9% in 2020.
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“The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty,” said World Bank Group President David Malpass. “In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labour, skills, and innovation to move into new businesses and sectors. World Bank Group support—across IBRD, IDA, IFC and MIGA—will help developing countries resume growth and respond to the health, social, and economic impacts of COVID-19 as they work toward a sustainable and inclusive recovery.”
The report also finds that many of the new poor will be in countries that already have high poverty rates. A number of middle-income countries will see significant numbers of people slip below the extreme poverty line. About 82% of the total will be in middle-income countries, the report estimates.
The World Bank 2018 survey put the number of poor in Nigeria at 78.5 million, poverty rate at 39.1 percent, with poverty gap of 12.5 percent and the ratio of poverty gap to poverty rate at 31.9 percent.
Reacting to the development, Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited said investment in the agriculture value chain, building infrastructure that can attract investment into the country, investing in quality education, financial inclusion strategies, security of lives and property and diversification of the revenue and productive base of the country will help to reduce the poverty level in the country.
“Governments of Nigeria at all levels are now working, in these directions, but more efforts are required to accelerate the process,” he said.
According to the report, the highest poverty rates are once again in Sub-Saharan Africa. Almost 70 percent of the region’s population is living below the US$3.20 poverty line and almost 90 percent is living under the US$5.50 poverty line. As in the case of extreme poverty, given the high rate of population growth in the region, the number of poor has increased over time.
Ayodeji Ebo, senior economist/head, research & strategy, Greenwich Merchant Bank, said as long as Nigeria’s economic growth rate continues to lag the population growth rate (average at 1.2% from 2015), the poverty rate will continue to increase.
This, he said has been the situation in the last few years. The high poverty rate can be attributed to the high insecurity in the country which has deterred domestic and foreign direct investments.
The World Bank report said there are stark overlaps in the forms of deprivation afflicting households in Sub-Saharan Africa (World Bank 2018).
The concentration of high poverty rates in Sub-Saharan Africa recalls the image of a poverty belt extending from Senegal to Ethiopia and from Mali to Madagascar. Of the 44 economies with available poverty estimates in the region, 38 have a rate of extreme poverty higher than 10 percent.
Half of the economies have poverty rates higher than 35 percent. These numbers become even more alarming when compared with the levels of extreme poverty in other regions. Of the 20 economies with the largest poverty rates (based on PovacalNet estimates), 18 are in Sub-Saharan Africa, and 2 are in the Middle East and North Africa (Syria and the Republic of Yemen), the report said.
