IMF report on poverty in Nigeria

ditorialThe International Monetary Fund (IMF), in its latest report on Nigeria, averred that despite the recovery of the nation’s economy from recession, more Nigerians were sliding into poverty. The Bretton Wood Institution’s report came a few days after the Special Adviser to President Muhammadu Buhari on National Social Investment Programme, Mrs Maryam Uwais, said that no fewer than 80 million Nigerians live in poverty. This underscores the fact that the government is not oblivious of the debilitating and devastating poverty in the land. But despite this cognizance, is the government doing enough to liberate Nigerians from the smothering muscle of the demon of poverty?

Mrs Uwais said that out of the 80 million poor people in the country, only about 455,857 (0.57 per cent) had been captured in the National Social Register (NSP) being used by the Federal Government for its National Cash Transfer Programme. And not even all those captured for the cash transfer programme get the monthly stipend of N5000; just 297,973 (0.37 per cent) of the identified poor get the monthly support of the government. The import of this is that the government’s strategy of battling poverty is warped and inadequate to reduce poverty. The government cannot effectively eradicate poverty by doling out money to the poor.

Rather than throwing money at the problem of poverty, the government should emplace appropriate policies that would facilitate economic growth and engender employment generation. While the role of the government in cushioning the effects of poverty on the vulnerable is not debatable, the government needs to come to the realisation that it will fail to properly protect the poor if it does not first create an enabling environment for businesses to thrive. Without businesses succeeding, there will not be enough tax revenue which the government would deploy to help the poor.

Poverty in Nigeria is rising principally because doing business in Nigeria is generally a nightmare. Businesses are going through a hard time and are forced to shed some of their workers because of the hostile operational environment. If an enabling environment is created for micro, small and medium scale businesses to thrive, a number of unemployed young people will be able to start their own businesses, which would result in the decline of poverty. If the right environment is created by the government, big businesses will thrive, expand their operations and create employment opportunities for the youth.

Although in 2016 the Federal Government set up the Presidential Enabling Business Council whose activities resulted in the country moving up 24 points on the ease of doing business index published by the World Bank in 2017, the fact is that there still exist institutional barriers such as the squabbles among government agencies located at the ports which slow down the pace of doing business in the country. Till date, it takes almost forever for companies to clear their imported items at the ports. This hampers businesses. When businesses are hampered, the economy flounders and poverty flowers.

Then, the cost of doing business at all levels is on the increase. As the cost of doing business climbs up, so does the viability of businesses go down with the effect that many of the organisations reduce their operations and are forced to let go of some of their employees. So, a nexus exists between scaling down the cost of doing business and slowing down the rise of poverty in a country.

One of the ways the government can reduce the cost of doing business is to address the nation’s infrastructure deficit. Moving finished goods from one end of the country to another still costs a fortune because of the poor state of the roads and the near absence of the rail system. In spite of the fortune expended on electricity generation, companies still have to generate their own electricity because the electricity companies have yet to get their acts together. So, the government should pull out all the stops to make businesses to thrive in Nigeria. When the government makes it easy for businesses to flourish, it indirectly prepares the ground for the citizens to move out of poverty, as many of them become productively engaged. It is a thriving private sector, not a stipend-sharing government, that holds the key to poverty reduction.