Pulling 100m Nigerians Out Of The Pit Of Poverty?

Ajaokuta Steel Company

Talk is cheap. But purposeful, pragmatic, people-oriented policies and programmes driven by political will in an economically favourable environment could make the desired positive change, especially to a citizenry long caught in the web of pillaging poverty. It is in the light of this assertion that one critically analyzes the recent promise made by President Muhammadu Buhari to take 100 million Nigerians from poverty to prosperity in the next 10 years! The pledge came in his speech made at the inaugural June 12, 2019 Democracy Day celebration in Abuja.

One shares in the president’s concerns because according to the World Poverty Clock Nigeria overtook India as home to the world’s extremely poor people in June, 2018. Worse still, the horizon looks dim for the country to meet the UNO Sustainable Development Goals(SDGs), part of which is to eradicate extreme poverty by 2030.Yet, there are other daunting challenges inching closer by the day.

Said he:“Our Gross Domestic Product (GDP) is expected to grow by 2.7 per cent this year, 2019. Our external reserve has risen to 45 billion dollars, enough to finance over nine months of current equal commitments. First, we will take steps in integrating the rural economy to national economic grade by extending access to input to rural farmers as well as credit to rural micro businesses and opening up many critical feeder roads.”

The president’s concern appears both noble and patriotic. Poverty alleviation  programmes of this administration such as the N-Power, Trader Moni, CBN Anchor Programme for farmers, spending N1.3trn on educational infrastructure in four years and N600bn approved to increase electric power supply attest to these.  In spite of these laudable initiatives 13.2 million school-aged children still roam the streets, food insecurity and high cost of living persist and Nigerians are going to pay more for electric power consumption soon.

Reducing poverty therefore, remains one lofty dream indeed, in the face of a looming global economic recession and in the absence of true fiscal federalism. There are other challenges. For instance, Nigeria’s economy is being negatively affected by the trade war between China and the United States. The US recently imposed fresh tariffs on imports from China from 10% to 25% to imports worth more than $200bn a year. The prolonged crises has reportedly sent distress signals to the stock markets in Europe, Japan and America. Nigeria is not immune from this, being an oil-dependent nation.

As at mid-August the Director General of the Lagos Chamber of Commerce and (LCCI), Mr. Musa Yusuf stated that a global crisis will affect the crude oil, which is the life blood of the country’s economy. Currently, demand for our crude oil is weakening. And Iraq, the second largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) has continued to pump above the output ceiling, producing an average of 4.85bpd.

Another challenge is the likelihood of Nigeria having to pay a whopping sum of $9bn of a judgment of the United Kingdom, and Property Courts(the Commercial Court) in favour of a foreign firm, Process and Industrial Development Limited.

Given an economic scenario that has Nigeria as the only democracy where the federal government calls the shots; controlling much of the oil revenue and the manufacturing processes are driven by fossil fuel- generators, Mister President’s promise may be like looking for a needle in a hay stack!

Perhaps, if Zamfara state controlled much of its enormous wealth in gold that has been conservatively put at N353bn loss to Nigeria due to illegal mining between 2016 and 2018 poverty might be consigned to the dustbins of history. That is, if the resources are properly managed by patriotic leaders.

What about Ondo state that boasts of 42 billion barrels of reserves of the highest quality of bitumen deposit estimated at being able to create 30,000 jobs on annual basis? Similarly, in a confirmatory statement, Energio Limited, an Australian company revealed that  it has discovered about 488 million tons, worth of iron ore with an In-situ Iron grade of 42.7 per cent in Agbaja, Kogi state. Accoding to the company, “the ore will largely affect the Nigerian economy, especially everything that has to do with iron, both usage and export”. But here we are still grappling with the way forward for the long-neglected Ajaokuta Steel company.

Ditto for the oil-rich, Nigeria-Delta region. As at October 2016, a report  claimed $17 billion in oil and liquefied natural gas was exported from Nigeria. Italy’s Eni, was alleged of not declaring $12.7 billion worth of crude and natural gas exports even as the militants began sabotaging pipelines in that part of the  country.

One can go on and on about the capacity of individual states to generate enough income, if they controlled their natural resources but for the military-imposed unitary system of government that we still operate. Now, the ever dependent states are raising eyebrows on how to repay the N416 bn bail -out funds they got from the federal government.That is, in spite of the fact that some of them could not even pay staff salaries and the entitlements of pensioners as at when due. Why won’t poverty persist?

  We may have to borrow a fresh leaf from China. According to the World Bank since China began its market reforms in the late 1970s, it has lifted more than 800 million people out of poverty, slashing the rate from 88% in 1981 to under 0.7% in 2015 as measured by the bank’s spending benchmark. That was based on the percentage of people living on the equivalent of US$1.90 or less per day. How did China succeed at it? What has made the country unique?

In 1978, China’s leader Deng Xiaoping kicked off the “reform and opening-up” campaign by focusing first on improving his nation’s dismal agricultural growth. Deng dismantled Mao Zedong’s communes, and allowed a return to family farming. That led to dramatic gains in agricultural incomes and savings, helping to provide funding for the industrial and urbanization coming next.

China’s economic feat is a particular story of implementing the right policies at the right time in the right place, as the country took advantage of the rise of globalization in a way that wouldn’t be possible today.

Another country to learn a lesson or two from is Rwanda. The 3rd Rwandan Living Conditions Survey released in February 2012 in the words of Paul Collier were  “deeply impressive” with Rwanda pulling off the very rarely seen “hat trick” of rapid growth, sharp poverty reduction and reduced inequality. As  a citizen, Daphrose Nyirabapagas gave his testimony: “We have built a good house, our children are nourished. When you feed well you think better….we have brought water and electricity home.”

Rwanda’s Vision 2020, articulated in 2000 set out to transform Rwanda into a middle-income country. In 2000 Rwanda was a subsistence level, agrarian based economy (accounting for the livelihoods of more than 90% of the labor force) with around 60% of the population living below the poverty line. But the paradigm has shifted. So, what is the secret?

“The answer seems to be a combination of the commitment, discipline and goal congruence of Rwanda’s leadership; the commitment of that leadership to a broad-based consultative and inclusive approach to Rwanda’s economic development”.

For Nigeria, certain critical steps have to be taken to reduce poverty. These include  a drastic reduction in the cost of running the apparatus of government. Putting  politicians on equivalent civil salary scales instead of their jumbo pay package, and allowing the enthronement of true fiscal federalism. Channeling money recovered from corruption issues to meet the needs of the poor will go a long way towards reducing misery in the land. But to get 100m Nigerians out of the pit of poverty remains a tall order, in the absence of the aforementioned factors.

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