The World Bank has predicted that Nigeria is heading into its worst recession in 40 years. It also projects that the Nigerian economy will shrink between 3.2% and 7.4% in 2021. According to the report, 89 million (43%) Nigerians live below the poverty line while another 53 million (25%) are vulnerable. The organisation, while presenting its six-monthly report on Nigeria, gave a forecast of 1.9% Gross Domestic Product (GDP) growth in 2021 and 2.1% in 2022. With the situations of increased insecurity, inequality, food inflation and stalled reforms, poverty is exacerbated. Inflation in the prices of food accounts for about 70% of the country’s total inflation. Marco Hernadez, a lead economist for Nigeria, submitted that over 200 million Nigerian are poor and that by 2022, the COVID-19 induced crisis is anticipated to push over 11 million Nigerians to poverty. The rate of inflation in Nigeria is expected to reach 16.5% this year.
Despite these predictions, the Federal Government has revealed that in the past two years, it has lifted 10.5 million Nigerians from poverty through various poverty alleviation strategies that were put in place by the President. One of the strategies deployed by the government to alleviate poverty is the National Social Investment Programme. The programme has over 32.6 beneficiaries taking part in the scheme. This cut across all persons in the country such as farmers, artisans, small-scale traders, market women and the like. The government has generated a database for the poor and vulnerable households which are spread across 708 local government areas, 86,610 communities, 8,723 wards in the 36 states and FCT. This is referred to as the National Social Register of poor and vulnerable households
Also, over 1.6 million poor and vulnerable households comprising 8 million Nigerians have benefited from the Conditional Cash Transfer Programme. Each household gets a stipend of 10,000 naira monthly. Furthermore, another strategy that the government has used to achieve the poverty rate reduction is the National Poverty Reduction with Growth Strategy (NPRGS), launched in April 2021. The scheme was approved by the Federal Executive Council (FEC) to reduce poverty rate through social protection programmes, investments, job creation, macroeconomic stabilisation, institutional reforms, amongst others.
One fact stands out – with the current endemic level of our economic challenges, it might not be easy to notice 10 million persons lifted out of poverty. The Nigeria Development Update (NDU) titled “Resilience through Reforms” conceded to the FG submissions and the various reforms aimed at reducing the poverty rate. It stated that the intervention schemes implemented by the government were timely to redeem the country from plunging into a deeper recession. It notes, however, that the Nigerian economy experienced a low contraction of -1.8% than had been predicted at the beginning of the pandemic (-3.2%). It further states that the economy started to grow again, but the rising inflation rate has severely affected Nigerian households. The NDU added that in order to reduce poverty, the federal and state governments must cut non-essential spending and channel resources towards COVID-19 response. On the other hand, transparency in the public sector has greatly improved, especially in the operations of the oil and gas sector.
However, despite the different measures taken to alleviate poverty, there is still much to be done. For the government to achieve its 100 million target of poverty reduction, it needs to mitigate developmental challenges and implement more critical and specific policies.
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The World Poverty Clock (WPC) reported that prior to the COVID-19 pandemic, 86.9 million Nigerians lived in extreme poverty. Also, the number of persons living in poverty was predicted to increase by about 2 million, a consequence of the rising population rate. During the pandemic, the WPC reported that 102.1 million persons, about 50% of the total population, are now living in extreme poverty.
The population rate keeps increasing and the resources and measures keep falling behind. The population of Nigeria is estimated at about 206 million. The population of the country is projected to increase to 263 million in 2030 and 401 million in 2050. This will make it become the third most populous country in the world. The exponential population growth is a product of high fertility and declining mortality. In 2018, the average number of children per woman was 5.3, while the death rate was 11.9 deaths per 1,000. Therefore, to attain demographic dividend in Nigeria, the government needs to create an enabling environment for economic growth and human development. Some measures the government should consider to achieve this include reduction of the number of children to less than four per woman, invest in maternal and child health, family planning and child survival, and prioritise education for girls, especially up to secondary education level. This would help to increase the marriageable age for girls, as well as give them a chance to be engaged in the labour force.
Also, there is need to diversify the economy, and invest in other industries through the attraction of Foreign Direct Investments (FDI) to the Special Economic Zones (SEZ), rather than depending on oil. This measure will reduce economic disparities among regions in the country, and ensure macroeconomic stability. Also, the government needs to increase the transparency and predictability of foreign exchange rate management policies. This will help agents to access foreign exchange at an agreed rate in a timely and orderly fashion. The country’s human capital development is stunted due to under-investment.
Furthermore, reopening the Nigerian borders fully and effectively for trade as well as strengthening cooperation among regions will reduce inflation rates and reduce poverty steadily. Hernandez stated that the return of subsidies through market-based pricing mechanisms, and electricity tariff reform will further alleviate poverty. Other measures to be considered by the government include targeted interventions to reduce the skill gaps, regional and continental integration, amongst others.
For all these measures to be effective, the government cannot do it alone. Poverty will be reduced when every Nigerian and all stakeholders in the Nigerian society take on mutual responsibility and ownership. Also, all stakeholders should monitor the progress of the policies in order to facilitate their effective implementation.