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Published On: Mon, Aug 18th, 2014

Nigerians suffering in the midst of plenty

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The National Bureau of Statistics (NBS) had last year released figures that showed the nation’s poverty level was on the increase. According to the Statistician-General of the Federation, Dr. Yemi Kale, at the time, about 112 million Nigerians (or 67.1 per cent of the country’s total population of 167million) lived below poverty level – that is living below US$1.00-US$1.25 per day.

In the words of Kale, “It remains a paradox that despite the fact that the Nigerian economy is growing, the proportion of Nigerians living in poverty is increasing every year.”

Not long ago, the CIA World Fact book had quoted poverty in Nigeria to be about 70 percent, at a point President Goodluck Jonathan administration was clamming improvement in lives and livelihoods.

In 2013, the government official data indicated that the economy experienced a growth rate of between 7.36 percent in first quarter and an estimated rate of 8.29 percent in the fourth quarter. This was followed by the recent World Bank report, which said the number of Nigerians living in poverty is increasing significantly.

The report revealed a perplexing contrast between the nation’s economic statistics on rapid economic growth and minimal welfare improvements for much of the population.

Aside from the increase in poverty, the organisation said progress towards a number of the other Millennium Development Goals (MDGs) in Nigeria has also been disappointing, stating that Nigeria was ranked 153 out of 186 countries in the 2013 United Nations Human Development Index, as unemployment rates have been steadily increasing and younger Nigerians are encountering increasing difficulty in finding gainful employment.

The growth rate in Nigeria, as stated, is by far more regional and continental average and, therefore, a quick look at Nigeria and Nigerians should give a picture of an economy with vital promises for its citizenry. However, the paradox is the deepening poverty in the midst of “remarkable growth”.

It is crystal clear that poverty walks in the street in Nigeria with impunity, giving people plate number on their foreheads. The big question is: Where are the destinations of the proceeds from economic growth? Or better put, who are the beneficiaries of this growth?

The Nigerian economy has enjoyed massive inflow of petrodollars due to catastrophic trend in the world oil prices, which gave the nation significant proceeds over the benchmark revenue from the oil sector. However, the gain is being enjoyed by an insignificant number of people who are now regularly referred as a cabal in Nigeria.

Obasanjo’s administration created the Excess Crude Account,which was later transformed to the Sovereign Wealth Fund (SWF) to serve two purposes. One is to create a buffer, the flow of fund from directly hitting the economy thus preventing possible overheating of the economy. Two, it was meant to be a trust fund to develop infrastructure. However, state governors and local government administrators mounted pressure and instituted litigation against the federal government which led to the sharing of the proceeds.

The end point of the sharing was increased looting by those at the helm of the affairs in the state and local government, while the ordinary citizens as usual benefited nothing. It led to skyrocketed inflationary trend borne by the same marginalised citizenry, since we shop in the same market.

It has been established that corruption in the system, to a greater extent, remains the most important obstacle, if not nuisance, to economic and social development. It threatens the achievement of the MDGs and the existence of the Nigerian state itself. Corruption in Nigeria affects commoners in different ways, often creating privileged groups and excluded ones.

So far, all attempts to tackle corruption in the country have failed for many reasons. First, politics are openly deemed the best way to become rich (before any political agenda whatsoever). Secondly, and as a consequence of this, there is no true political will by the present administration to fight corruption. On the contrary, this would affect politicians’ businesses. Thirdly, the great ethnic diversity in Nigeria contributes to the lack of national cohesion and opposition to the problem of corruption.

What is frustrating is that Nigeria does have the financial resources to fight corruption and develop proper law enforcement agencies. Moreso, the government must have enough money to solve a huge part of poverty in Nigeria on its own. If waste and corruption were overcome, money could finally go to the country’s infrastructure: hospitals, running water, education system, etc. Corruption remains the main cause of systematic waste of the country’s resources, and therefore, the main cause of poverty in Nigeria.

On the bright side, since President Jonathan – and despite the many controversies and recent terrorist bombings under his presidency – the pace of reforms has been slow and Nigeria has not fared better. Nigeria is Africa’s oil producer but the sector has been tainted by accusations of corruption.

The parallel trend between economic growth and poverty explains the deepening trend in inequality in Nigeria. It was said that only ten Nigerians are richer than the remaining Nigerians put together. Government policies in Nigeria are not welfare enhancing; they are rather poverty and inequality promoting. The massive flow of foreign exchange from the oil sector has regularly leaked out through misapplication, mismanagement and corruption. In addition, it shows that the inflow from oil is not being effectively plugged into other sectors the same way the colonialists applied the earnings from cocoa, groundnut, coffee, among other things for development.

The way economies work to alleviate poverty is to provide the opportunities for factors of production, an important component, which is man, or labour, to earn income by being employed. Income from factors will be applied to consumption, promote industrial and general sectoral growth and the cycle of

 encompassing growth.

However, the oil sector is capital-intensive and therefore, can accommodate minimal percentage of labour participation. The generality of Nigerians can, therefore, only able to benefit from the oil sector legitimately by applying the oil proceeds to developing other sectors that are labour intensive.

The implication of the latest poverty report is that the common man in Nigeria has benefitted nothing from the country’s oil wealth to the extent that most of them are now praying for the oil to dry up since the black gold has become more of a curse instead of a blessing like other oil nations of the world. While few Nigerians have seen the good side of oil, the average Nigerian has experienced the bad and the ugly side. This is the main reason why most youth are leaving the country in search of a better life.

The Jonathan administration has increasingly made reference to Nigeria’s GDP and economic growth as signs of successes while several Nigerians lament that those growth have not had a corresponding effect on the lives of average Nigerians, as they cannot eat GDP.

Economic experts are of the view that the nation’s economic team needs to do a lot more than churning out economic policies that do nothing to better the lot of the common man saying that the acclaimed growth is only positive when the life of the average Nigerian is bettered by it.

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