61 years after independence, Nigerians poorer now than ever
•Poverty rate moved from 15% in 1960 to 50% in 2021 •May never solve infrastructure deficit —Emefiele •Rising poverty cause of insecurity —Ahmed
POVERTY rate in Nigeria moved from 15 per cent at independence in 1960 to 50 per cent in 2021, Nigerian Tribune findings have revealed.
This is even as Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, at the weekend insinuated that Nigeria may never be able to solve its infrastructure challenges.
According to the World Bank. infrastructure services in energy, transport, water and telecommunications services underpin the wealth of modern nations. Also, while delivering the convocation lecture of Nigeria Defence Academy (NDA), Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said excruciating poverty in Nigeria was responsible for widespread insecurity.
Emefiele who addressed a group of journalists in Lagos on Saturday, quoted a Moody’s report, which concluded that Nigeria needed to spend about $3.3 trillion in capital expenditure over the next 30 years or $1.1 trillion a decade to close its infrastructure deficit.
This amounts to $100 billion (N40 trillion) per annum or 28 per cent of Nigeria’s GDP of N144 trillion.
Nigeria has spent just about $100 billion on infrastructure provision in the last 10 years.
In Nigeria, the current level of infrastructure deficit is a major constraint to economic development and attainment of growth average rate of at least five to seven per cent required to boost productivity and sustainable growth for businesses.
He quoted the World Development Indicators (2019) that said “56.20 per cent of Nigerians have access to electricity, while electric power consumption stood at 144.52 kWh per capita as of 2018.”
While infrastructure deficit in Nigeria is estimated to be about 1.2 per cent of GDP, it is projected that the Federal Government needs to commit about $100 billion annually to address the nation’s infrastructural deficit,” Emefiele said.
In her 19th convocation lecture at NDA, Ahmed said there was a near-global consensus among world leaders, policy experts and academics that the fight against poverty was essential to ensuring global peace, security and stability. “These mutually reinforcing phenomena have been coined the ‘doom spiral’; poverty is both a cause of insecurity and an outcome of it,” she added.
According to the National Bureau of Statistics, then known as Federal Office of Statistics, about 15 per cent of the population was poor by 1960, rising to 28 per cent in 1980.
The latest report from Nigeria Employers Consultative Association (NECA) shows that the incidence of poverty rose by 10 per cent between 2019 and 2020. In the October 2020 report, NECA said the number of citizens in extreme poverty stood at 102 million representing 50 per cent of Nigeria’s estimated population of 205 million.
NBS reported a 40 per cent poverty rate in 2019. The World Bank also said in June this year that 11 million additional Nigerians would fall into extreme poverty by 2022.
Managing Director, Financial Derivatives Company (FDC) Limited and a member of President Muhammadu Buhari’s Economic Advisory Council (EAC), Mr Bismarck Rewane said recently that Nigeria remained the poverty capital of the world. However, on the negative side, the FDC boss listed some developments that should worry Nigerians, including the falling of total capital importation to $875.62 million in Q2’21, from $1.91 billion in Q1’21, and the crashing of the parallel market rate to N526/$ on Foreign Exchange (FX) supply shortages.
According to him, Nigeria’s second quarter year on year positive Gross Domestic Product (GDP) has yet to have a significant impact on socio-economic conditions.
“Fastest growing sectors were the most impacted by the [COVID-19] shutdown. They are job-elastic and have the potential to boost productivity. Real GDP (2.7 per cent) is still below potential GDP (8.3 per cent). The economy is still in a recessionary gap. Population (3.2 per cent) growing faster than GDP.
“Nigeria still the poverty capital of the world: 93.9 million people now live below the poverty line. Youth unemployment is fast approaching 45 per cent. Misery in- dex is 50.68 per cent. Nigeria [is] a hunger alert hotspot, according to FAO and WFP. Over 18,000 Nigerians are seeking asylum. Health sector brain drain rising (e.g. about 500 doctors moving to Saudi Arabia),” he said.
Official statistics revealed that Nigeria’s economic growth averaged 0.70 per cent from 2015 to 2020. Nigeria was not on the top 10 list of fastest growing economies in Africa during the period.
The largest economy in Africa was ranked 39th place in average GDP growth during the period. In the recently published Nigeria’s capital importation report for the first and second quarter of 2021, by the National Bureau of Statistics (NBS), it was revealed that Nigeria received a sum of $875.62 million foreign inflows in Q2 2021, representing a significant year-on-year decline, as foreign direct investment (FDI) fell to its lowest level in over 11 years.
Foreign direct investment (FDI) dropped to $77.97 million in the second quarter of 021, indicating a 49.6 per cent and 47.5% decline compared to $154.76 million and $148.59 million recorded in the previous quarter and second quarter of 2020 respectively.
Also speaking at the Kaduna Economic and Investment summit (KADINVEST) on Friday, Former Emir of Kano, HRH Sanusi Lamido Sanusi, described Nigeria as a giant of Africa with clay feet.
He said other Africa countries like Ghana, Senegal and Kenya were better placed economically than Nigeria. “Only nine per cent of new graduates in Nigeria find employment, so we have an incremental 4.5 million people added to the unemployed annually. 41 per cent is the number for youth unemployment. Overall, we have 27 per cent unemployment among the youths, which is the most serious component of the population and that is why you have restiveness, thuggery, crime and that is why you have insecurity”.
Sanusi lamented that Nigeria is ranked 114 in the global innovation index; we are lower than other African countries like Kenya, Rwanda, and Senegal. We are ranked 14 in Sub-Saharan Africa. I think we should have this reality check and know where we are as a country. If not, we continue to call ourselves giant of Africa; we are a giant with clay feet. We are 14 in innovation in Sub-Saharan Africa.
Countries like Senegal Kenya are ahead of us and I am not even talking about South Africa. Our expenditure on education as a country is only seven per cent of the budget. We are spending less than Ghana on education, not on percentage, but in absolute terms. And we are surprised that companies are moving to Ghana, that industries, individuals are moving there. We are not investing in education and human capital. We have a 68 per cent mismatch between graduates’ skills and job requirements, the major areas been communication, IT and decision making.”
He said the countries that are growing are those that have developed their human capital and not resources. The former CBN Governor had earlier in the year analysed that Nigeria made no economic progress in the last 40 years.
“In 1980, Nigeria’s GDP per capita on purchasing power parity basis was $2,180. In 2014, it appreciated by 50 per cent to $3,099. According to the World Bank, where were we in 2019? $2,229.
At this rate in the next two years in terms of purchasing power parity, the average income of a Nigerian would have gone back to what it was in 1980 under Shehu Shagari. That means, in 40 years, no progress, we made zero progress. 40 years wasted.
Between 2014 and 2029, on the basis of this index of the purchasing power of the average income of an average Nigerian, we have wiped out all the progress made in 35 years. We have a responsibility as a people to rise and improve the lives of the people of this country.”
The World Bank Ease of Doing Business index, ranked Nigeria 131st, 169th on “Getting Electricity, 183rd on Registering Property and 179th on trading across borders globally. Nigeria also remains one of the most corrupt nations on the planet. Transparency International ranked the country 144 out of 180 in its 2018 corruption perceptions index.
Global auditing firm, PricewaterhouseCoopers (PwC) warned that if corruption was not dealt with immediately, it will cost Nigeria up to 37 per cent of its GDP by 2030, amounting to nearly $2,000 per Nigerian resident by 2030, PwC said.
Recent international investigations have alleged that both the 2015 and 2019 general elections were funded by bribe monies from crude oil merchants.