What Nigeria Can Learn from How China Eradicated Poverty

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By ‘Wale Oluwade

The biggest Strategic Issue confronting Nigeria today is extreme poverty. Currently, according to the World Bank, United Nations, and several reputable global Think Tanks, there are about 90 million Nigerians living on less than 1.25USD daily. First, what is a strategic issue? In broad terms, a strategic issue is defined as “an external development or trend which has the potential to impact on an organization’s profitability and market share to such an extent as to threaten its survival, or any action by the organization which has the potential to threaten the survival of rival organizations.”

The evolution of corporate strategy as a core discipline in the business environment arrived at the determination of certain issues or factors which are considered strategic in nature. Likewise nations, certain factors have contributed to the failure or success of nations across the world. The humongous crises ravaging Nigeria from many fronts are all inexorably tied to extreme poverty ravaging more than half our population.The near-total state of anarchy, evidenced by; terrorism, gangsterism, kidnapping, armed robberies, murders, arson, lawlessness, ethnic violence and uncontrolled population explosion all derive from and are connected to extreme poverty.

Now the simplest way to end poverty is to put people to work. T his is where China becomes a case study. I choose China for the simple reason that as of 1990, it had a whopping 756 million of her population living in extreme poverty. What did China do to wipe out poverty among its about 1.5billion citizens? Very simple. First, Chinese leaders realized the quantum of its extreme poor population is a timed nuclear device and decided to confront this frontally. Second, the Chinese leaders also realized that the major existential threat confronting them was not foreign; U.S., Russia or Japan, but her own jobless hordes who would soon rise and wipe them away. What did they do? The action steps taken fall generally into the following four broad categories;

China’s Action steps to Poverty Eradication

The China Communist Party (CCP) developed a comprehensive poverty eradication plan and an implementation strategy of achieving same. The plan had a five-year renewable cycle, with measurable goals, timelines for attaining same, rewards or sanctions for responsible officers. The CCP federal government owned and still owns,and is the main driver of the poverty eradication programme. The plan is developed by the central government decisionmaking organ (Politburo)and this is drilled down to the provinces, the counties and the rural villages. The nature of Chinese government system makes the workability of the plan a lot faster since it is a socialistsystem with a central authority at the Politburo.

There is a nationally appropriated budget for the program which has steadily increased every plan cycle of five years; current amount is Rmb282.2bn (US$41.7bn) in 2013–17, more than double the level of the previous five years, with big jumps in 2016 and 2017.This figure is way above the entire fiscal budgets of several African nations including Nigeria.

The funds deployed under the poverty alleviation campaign cover several areas, including financing for rural infrastructure, agricultural subsidies and discounted loans. The broad goal of such assistance is to encourage self-development and empowerment of poor populations— rather than providing a handout from the government.

The central government has set poverty alleviation as a criterion on which officials’ job performance will be evaluated, in addition to traditional indicators such as GDP and social stability. This in essence means that government workers have clearly set targets of fixed number of persons/families moved out of poverty and importantly how this impacts on GDP and HDI growth indicators.

“Industrial poverty relief”whereby enterprises are encouraged to invest capital in development projects., and “mass entrepreneurship and innovation” campaign has also introduced additional market elements into the campaign, offering incentives and loans for rural residents to take on self-employment and create small businesses in rural areas.. Another introduction is the Resettlement Plan as an approach to tackling poverty alleviation.

The strategy dates back to previous administration’s “new socialist countryside” policy, aimed at bringing rural residents to small towns, thus allowing for urbanization and agricultural modernization. The urbanization strategy released by Mr. Xi’s government in 2014 had a similar focus on migration to smaller conurbations. The major difference, however, is in the scale of the ambition: during the 13th five-year plan period (covering 2016–20), 10 million people nationwide are targeted for resettlement, up from 2.4m during the 12th five-year plan period (2011–15).

Government bureaucrats have less discretion in choosing where to invest poverty alleviation funds and oversightby the CCP’s anti-corruption agencies has also been significantly enhanced.

China’s Poverty Reduction Achievements

As the world’s largest developing country, China has always attached great importance to poverty eradication and human development. Some key Chinese achievements in its poverty eradication plan are;

ü According to the global 1.25 USD poverty line, from 1981 to 2013, China lifted 850 million people out of poverty, with the percentage of people living in extreme poverty falling from 88% to 1.85%.

ü China has contributed about76% of the poverty reduced across the world, making itself a country with the most people lifted out of poverty in the world.

ü China is the first developing country reaching the poverty reduction goal.

ü UN report: 76% of the achievements made in the global poverty reduction cause come from China.

What Lessons for Nigeria?

The foregoing reveals quite evidently that what the current regime is engaged in is simply not a poverty eradication strategy. It is nothing but mere publicity stunts.Some more cynical have dubbed it “Advanced vote buying scheme”. A few enquiries will suffice; where is the single verifiable register containing all the data of extreme poor persons/families in Nigeria? What is the budget currently being expended? When was it appropriated? How many people have been lifted out of poverty since they began this adhoc cash distribution? What informed the choice of beneficiaries? What impact has this adhoc system have on the nation’s GDP?How has the one-off cash donation of less than $30 impacted on the beneficiaries’ living standards? Interestingly, there used to be an agency called the national Poverty Eradication Programme (NAPEP), whatever happened to it?

However, for this country to make substantial impact in poverty eradication, the following steps are critical; first, there has got to be a plan, a simple but comprehensive master plan designed along similar lines of the Chinese, that is, targeted at those forgotten in the rural villages, to combat extreme poverty and eradicate it from our land. This must have specific goals, timelines for attainment, impact on GDP and HDI. Second, there is an urgent need to conduct an evidenced based census of extreme poor Nigerian citizens; their age, gender, location, skills/vocation (If any), education level(if any), disability, (if any), etc. Third, the repositioning of NAPEP to make it a federal and states owned agency and funded directly from the federation account to which funds to be administered strictly for implementation of this master plan. Fourth, instead of borrowing billions of dollars from the Chinese, which we can’t repay because the people are largely miserable and unproductive,and thereby threatening our national security,I would rather we invite the Chinese to assist in transferring their poverty eradication know-how to us. That is the essence of strategic alliances.

This writer can be reached at @WaleOluwade