Nigeria is an abundantly blessed country filled up with poor people. It’s disheartening.
Why?
Policy sommersaults, leadership problems, leakages, ostentation, wastage and more, name it; the factors causing this nationwide economic distress are above the hip.
The world biggest lender, the world Bank thinks Nigeria is doing horribly with its finances, a situation tugging citizens in the mud of poverty. While that looks like a fraction of the ‘devil in the detail’ only a few would hold the World Bank on any honour.
The world bank while painting a grim picture of Nigeria’s economic landscape, asserts that the nation is grappling with alarming financial challenges, dragging its citizens into the quagmire of poverty.
Rising Poverty Rates: A Disturbing Trend
The World Bank’s Nigeria Development Update, titled ‘Turning the corner: From reforms & renewed hope, to results,’ unleashed a disconcerting revelation—Nigeria’s poverty rate surged to 46 percent in 2023, encompassing a staggering 104 million impoverished Nigerians.
This distressing climb from 40 percent in 2018 signifies an increase of 24 million people living below the national poverty line.
The catalysts behind this distressing trend are identified as sluggish economic growth and soaring inflation, creating a precarious environment for the country’s vulnerable population.
The World Bank in a recent report states:
“Sluggish growth and rising inflation have increased poverty from 40 percent in 2018 to 46 percent in 2023, pushing an additional 24 million people below the national poverty line,”
Urban-Rural Disparities and Tinubu’s Reforms
The report delves into the nuanced impacts, revealing that the number of poor people in urban areas, more susceptible to inflation, surged from 13 million to 20 million. Simultaneously, rural areas witnessed an increase from 67 million to 84 million within the same period.
Amidst the concerning statistics, a glimmer of hope emerges with the World Bank predicting a reversal of the upward trajectory.
President Bola Tinubu’s recent reforms, including ending petrol subsidies and devaluing the naira, are anticipated to play a pivotal role in mitigating the escalating poverty rates.
A segment of WB report further asserts that:
“In the medium term, the reforms will reverse this trend through higher growth and lower inflation, but to a limited extent, with poverty rates decreasing from 46 percent in 2024 to 44 percent in 2026,”
National Multi-Dimensional Poverty Index: A Broader Perspective
The National Bureau of Statistics (NBS) supplements the World Bank’s findings with its National Multi-Dimensional Poverty Index, revealing that 133 million Nigerians grapple with poverty due to inadequate access to health, education, living standards, employment, and security.
The report highlights states with the highest poverty rates, with Sokoto leading at 90.5%, followed by Bayelsa, Gombe, Jigawa, and Plateau.
Additionally, the report unveils the regional disparities, with 65% of poor Nigerians residing in the north and 35% in the south. It emphasizes the urban-rural divide, indicating that 72% of people in rural areas are impoverished compared to 42% in urban areas.
CBN’s Projections
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, projects a decline in inflation and oil revenue in 2024, offering a ray of hope amidst the prevailing economic challenges. The anticipation of reduced oil revenue is attributed to the production limit of 1.78 million barrels per day.
While economic growth in sectors like oil, telecoms, finance, the stock market, and real estate is noted, concerns arise about the exacerbation of income inequality.
Femi Awoyemi in a piece observes that these industries, while contributing to growth, lack significant labor intensity, leaving the country’s high unemployment rate largely unaddressed.
As Nigeria continues to steer these multifaceted economic challenges, the convergence of strategic reforms and sustainable policies becomes imperative for a nation accelerating and applying policy brakes at the same time; an inclusive and robust growth is all that matters as we speak.
Culled in by Fortune Omosola
