By Oladeinde Olawoyin,
ABUJA Nigeria
The World Bank has said that the number of poor Nigerians is projected to hit 95.1 million in 2022. The bank made this known in its poverty assessment report titled ‘A Better Future for All Nigerians: 2022 Nigeria Poverty Assessment’.
The report noted that COVID-19
crisis is driving up Nigeria’s poverty rate, pushing more than 5 million additional
people into poverty by 2022.
With real per capita GDP
growth being negative in all sectors in 2020, the bank said poverty is
projected to have deepened for the current poor, while those households that
were just above the poverty line prior to the COVID-19 crisis would be likely
to fall into poverty.
“Were the crisis not to have
hit (the counterfactual scenario), the poverty headcount rate would be forecast
to remain virtually unchanged, with the number of poor people set to rise from
82.9 million in 2018/19 to 85.2 million in 2020 and 90.0 million in 2022, due
largely to natural population growth,” the bank said.
“Given the effects of the
crisis, however, the poverty headcount rate is instead projected to jump from
40.1 per cent in 2018/19 to 42.0 per cent in 2020 and 42.6 per cent in 2022,
implying that the number of poor people was 89.0 million in 2020 and would be
95.1 million in 2022. Taking the difference between these two scenarios, the
crisis alone is projected to have driven an additional 3.8 million Nigerians
into poverty in 2020, with an additional 5.1 million living in poverty by
2022.”
Last year, President Muhammadu
Buhari claimed that his government lifted 10.5 million Nigerians out of poverty
between 2019 and 2021, but a PREMIUM TIMES’ fact-check found the claim to be
untrue.
The report noted that
Nigeria’s growth performance was declining even before the COVID-19 crisis.
Between 2000 and 2014, it
noted that Nigeria enjoyed a period of sustained expansion, during which the
economy grew by around 7 percent per year, outstripping the estimated annual
population growth rate of 2.6 percent. Yet real GDP growth dropped to 2.7
percent in 2015, then -1.6 percent in 2016, as the decline in global oil prices
induced Nigeria’s first recession in almost two decades.
“Growth has not recovered
subsequently,” the bank said.
“It lies below population growth and the growth performance of peer countries over the same period. This weakening overall growth performance makes it significantly harder to reduce poverty.”
The World Bank added that
Nigeria’s dependence on oil exports is one of the leading causes of its frail
growth prospects, and it may also prevent any growth from being broad-based. In
2019, while oil represented just 10 percent of GDP, oil accounted for more than
80 percent of Nigeria’s total exports.
“Indeed, this has been true in
every year since the 1970s,” the bank argued, noting that it leaves Nigeria’s
economy extremely exposed to movements in global oil production and global oil
prices. Despite oil’s importance for exports, extractive industries are not a
large employer in Nigeria, the bank said.
“This means any growth due to
oil production would not necessarily be shared among workers and households:
less than 1 percent of working Nigerians are employed in mining and
extractives, with the share being even smaller among those from poor
households,” it noted.
The Washington-based
institution argued that other distortionary policies—especially on exchange
rates and trade—could further weaken Nigeria’s prospects for inclusive growth
and poverty reduction.
According to the bank, Nigeria’s multiple exchange rates for different types of transactions and the country’s trade restrictions—including bans on certain goods and the 2019 border closure—may reduce investor confidence, which, in turn, could limit foreign direct investment (FDI) and competition, factors required to support firms and the job creation needed for broad-based growth.
“Such policies can also have
immediate negative effects on poverty reduction through the price channel, as
trade restrictions can make the goods that poor households consume—especially
food items—more expensive, reducing people’s purchasing power and welfare in
turn.”
The bank argued further that
climate change could intensify shocks and limit opportunities to spread the
proceeds of growth. The report noted that many non-poor Nigerians are only one
small shock away from falling into poverty, while those who are already poor
could be pushed into even deeper deprivation.
“Climate-related shocks—such
as floods and droughts—are particularly harmful because they threaten the
rain-fed agricultural and pastoral activities that are common among households
living below or just above the poverty line,” it said. - Premium Times
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