As the cost of living in Africa’s biggest economy continues to rise for its citizens amid record unemployment, Imo, Adamawa, and Akwa Ibom have been listed among states with more miserable Nigerians.
The misery index, an indicator used to determine how economically well off the citizens of a country are, has hit 74.03, 72.9 and 71.3 percent in Imo, Adamawa and Akwa Ibom, according to data from the National Bureau of Statistics (NBS).
The index is calculated for the states by adding the seasonally adjusted unemployment rate to their May inflation rate.
“If you look at the unemployment statistics of the states, you will discover that states in the oil-producing region have the highest unemployment rates,” said Damilola Adewale, a Lagos-based analyst in a phone response to questions.
“This is actually because oil is the main economic activity in these states. So, they employ little manpower due to their capital-intensive nature. The oil sector contributes less than five percent to employment,” Adewale said.
Tajudeen Ibrahim, director of research and strategy at Chapel Hill Denham noted that the three top states have large rural populations and high insecurity rates that have continued to deter investments.
“These are states with high rural populations and low business attractions for investors. Some of the states also have a high level of insecurity, so inflation and unemployment will naturally be high,” he said.
Imo, Adamawa, and Akwa Ibom did not record any investments in the first quarter of 2022 out of the $1.6 billion foreign direct investments that Nigeria recorded in the period, according to data from the Capital Importation report.
In 2021, Imo and Adamawa did not record any investment, but Akwa Ibom recorded $740 million out of the total $6.75billion that came into the country.
“If you take a good look at the states, you will find out that their economic activities are low and investment is also inexistent in these states going by the capital importation data released by the NBS,” Adewale said.
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Nigeria’s inflation rate quickened to an 11-month high at 17.71 percent in May, a level that shows it is more expensive to live in Africa’s most populous nation today than it was in 2015, according to the most recent inflation data from NBS.
With food inflation hitting 19.5 percent, the key driver of Nigeria’s core inflation as over 90 percent of Nigeria’s working population spends 60 percent of their income on food and related food-related expenses, analysts say.
The country has an unemployment rate of 33.1 percent, with Nigerians getting poorer in real terms, and the middle class shrinking.
While it would appear that the economy has improved, culminating in a 3.11 percent growth in the first quarter of 2022, most of it is elusive. It is eluding a vast majority of Nigerians and has not been able to reduce poverty or lead to the creation of sufficient jobs.
With these realities, many of the country’s citizens are now more mired in poverty than most of their counterparts in other emerging economies.
Out of the list of the 36 states analysed by BusinessDay, the three states are followed by Cross River, Yobe, Abia, Edo, Rivers, Ebonyi, and Kaduna as the top 10 states, while Osun, Benue, Sokoto, Zamfara, and Kwara have the least among the 36 states with a misery index of 28.59, 29.2, 30.83, 31.23, and 32 percent respectively.
On what the state governments can do to reduce the misery index of their states, experts urged them to depend less on the FAAC allocations from the federal government, rather they should concentrate on tapping opportunities in the areas of their respective states.
“The leadership of these states needs to remove the mindset of letting FAAC be their main driver of revenue generation because their dependency on FAAC has made them very lazy in terms of developing strategies that will promote economic development,” Adewale said.
“They can look inwards and map out areas in which they have a comparative cost advantage, and improve their business environment to attract both local and foreign investments. All these will lead to job creation which will reduce poverty.”
