Nigeria, being the poverty capital of the world, has become a cliche. The country is on the path of fulfilling The Economist’s prediction that in the not-too-distant future, 80 per cent of the world’s poorest will reside in it and the Democratic Republic of Congo. Nigeria needs an all-hands-on-deck approach to negate this prophecy.
Last month, the nation was stunned by a report from the National Bureau of Statistics confirming that 133 million Nigerians live in multidimensional poverty.
This is more alarming than the 90 million or thereabout earlier said to be living in extreme poverty in Nigeria. What is the difference? The 90 million is calculated based on daily $2.15 income per person, MDP introduces other dimensions like the quality of health and education, hence multidimensional. Either way, Nigerians are getting poorer by the day.
Joining the fray were two other gentlemen who spoke for two separate institutions. Professor Kingsley Moghalu’s Institute for Governance and Economic Transformation published a 50-page document titled, ‘Nigeria’s poverty trap and how to end it’, which is in tandem with the NBS report as it highlighted the multidimensional poverty over income-based poverty.
The second gentleman, Mr Asue Ighodalo, the immediate past chairman of the Nigerian Economic Summit Group, while delivering his valedictory address at the close of the 28th summit spoke on converting from shared poverty to shared prosperity. While the NBS was descriptive of our poverty, we had fair nuggets of prescription to end poverty in Nigeria in the IGET document and Asue Ighodalo’s valedictory speech.
The IGET report, while not de-emphasising the importance of per capita GDP income in reducing poverty, seems to assert that targeting aspects of poverty and reducing them individually is more important, as it has been attempted with the Millennium Development Goals and Sustainable Development Goals. Past ChairmanAsue Ighodalo feels otherwise. He puts a growing GDP of almost $10tn by 2050 as the way to go. The question is where lies the answer?
Isn’t it a lack of adequate national and individual income that births MDP? If we can’t solve the problem of income generation, we cannot solve MDP. Why do nations gun for sustainable GDP growth?
It is because with a growing GDP, millions of people are at work receiving salaries and wages, and the more vibrant and inclusive the growth, the more people are at work and lifted out of poverty in a sustainable way. This is unlike the handouts path which I associate with the offering of alms or spoon-feeding.
A handout is precisely what has been the situation for the last eight years. The economy has stagnated to a level below what it was in 2015, and the government beats its chest with intervention programmes and is surprised that poverty actually increased despite its numerous handouts. The Federal Government scurries to blame the state governments.
They had put the cart before the horse. If you seek proof, look no further than the MDGs and SDGs, earlier attempts to reduce poverty but to no avail. I see little justification in going this route as the SDGs are more multidimensional than the new ones. Did China lift 750 million people out of poverty through MDGs or SDGs such that we in Africa should follow the route?
Often we also extract the wrong lessons from the Chinese miracle. We talk about China’s investment in human capital and education, forgetting it was backed up by huge capital accumulation in China to grow the Chinese economy and absorb the output of human investment. Why are our skilled youths fleeing in droves? They can’t be absorbed into good-paying jobs because we didn’t pay attention to national capital goods accumulation at a rate that exceeds human capital development and accumulation.
This is where Ighodalo’s valedictory speech is of utmost importance because he gave the income-growth option as the cornerstone for prosperity. As paraphrased by Onwuamaeze in another publication, Ighodalo tasked those entrusted with drafting the Nigerian Agenda 2050 to bequeath the country with an economy whose size will be between $4.5tn and $9tn in the next 25 years in order for a country to have shared prosperity, rather than shared poverty. He said, “We must then set for ourselves the target of growing at 15 per cent every year.”
The country’s inability to sustain high GDP growth testifies to our poor economic management skills at national level. As a result, African countries’ currencies lose multiples of their value in periods of economic crises, sending inflation high and impoverishing the citizens.
Understanding what makes for proper macro-management of an economy is a must before we proceed to micromanage the dimensions of poverty.
Mr Ighodalo was bolder and looked at the possibility of a $10tn economy in the face. This is the elite consensus we need as requested by Prof Kingsley Moghalu. Anyone expecting a favourable elite consensus from the Nigerian elite is expecting too much. But the Nigerian elite is very selfish and pernicious. It is usually what is in it for them and the rest of society can go to blazes.
Typically a section of our elite would say “with lack in the land, the cubs of the lion will always find prey to feast on.” Our policemen are being mowed down by protecting the elite. At the end of the day, most of the elite don’t have a clue about wealth creation as most of them are rent takers and not wealth creators.
To the propagators of SDGs and MDGs, I say you are in the sphere of redistribution of a country’s wealth and are irked with wealth inequalities within countries, but let’s know how to create and increase wealth first. Let’s realise that increasing the wealth of nations is a recent phenomenon that arrived with the industrial revolution in the 17th century. So, how can we prevent our elite in the guise of fighting for the poor? How do we prevent them from diverting our common proceeds and wealth into their pockets?
One is not averse to societal interventions for the weakest in society as we shall always have the poor.
One is also weary of the state being the vehicle for this intervention. Can our religious organisations be encouraged to be at the fore? They should make their members conscious and conscientious towards the less privileged. They could also help society organise robust safety net rather than the state doing it.
A balance has to be struck between both pathways in order to eradicate poverty. For now, the scale should be tipped towards concentrating efforts on increasing GDP income.
Unfortunately, this has not received as much attention as in reducing multidimensional poverty. However, no need to reinvent the wheel as many Asian countries have successfully looked into the toolbox of a nation’s wealth creation and applied the necessary kits for wealth creation. Nigeria should do the same.
New thoughts for reducing multidimensional poverty (punchng.com)
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