Analysts Seek FG’s Focus on Job Creation to Reduce Poverty

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· 83m live in poverty, says NBS

Nume Ekeghe

Analysts yesterday urged the federal government to introduce policies to stimulate job creation to combat the rising poverty rate in the country.

The analysts, while reacting to the 2019 Poverty and Inequality in Nigeria report published yesterday by the National Bureau of Statistics (NBS), which showed that 82.9 million Nigerians are currently living below the national poverty line, called for policies to boost micro, small and medium scale enterprises (MSMEs), increase agricultural output and encourage investment in critical sectors of the economy in order to alleviate poverty.

The NBS also puts the current poverty rate at 40.1 per cent.
The national poverty line is determined by adding the food poverty line and cost of non-food basic needs.

The NBS said going by the current value of the poverty line set at N137,430 per person per year, individuals living in households whose per capita annual consumption expenditure is below the threshold are regarded as poor by national standards.

According to the report, Sokoto State tops the chart of the highest poverty rate in the country with 87.73 per cent of its population living below the poverty line while the lowest rate is in Lagos with 4.50 per cent.

NBS, however, excluded Borno State from the study as the sample collected was not representative of the whole state because some parts could not be accessed obviously as a result of the insecurity challenges bedeviling the region.
The NBS put urban poverty index at 18.04 per cent while the rural poverty rate is estimated at 52.10 per cent.

The report also estimated the country’s current national inequality index (Gini coefficient) at 35.1 per cent with the urban and rural indexes accounting for 31.9 per cent and 32.8 per cent respectively.

It stressed that on the average, four out of every 10 Nigerians had their real per capita expenditures falling below N137, 430 on an annual basis of N369 per day in the households.

However, the Harmonised Nigeria Living Standard Survey (HNLSS) 2009/2010, previously published by the NBS had put the country’s poverty index at 69.0 per cent.
Also, in October 2018, the United Nations Development Programme (UNDP) in collaboration with the NBS released the Nigeria Human Development Report 2016, which estimated Nigeria’s poverty index at 53.7 per cent.

But the statistical agency cautioned that it is technically impossible to compare the current poverty levels (2018-2019) with the 2003-2004, 2009-2010 outcomes- as the methods of data collection are not similar.

The Statistician-General/Chief Executive, NBS, Dr. Yemi Kale, said the accuracy and cost-effectiveness introduced in the 2019 survey made data and statistics from previous poverty reports incomparable.

He said: “The 2019 study is accordingly treated as a base study and any comparisons with previous poverty studies should be treated with caution.”
According to the report, Abia, Adamawa, and Akwa Ibom have poverty rates of 30.67 per cent, 75.41 per cent and 26.82 per cent respectively.

Others are Anambra 14.78 per cent, Bauchi 61.53 per cent, Bayelsa 22.61 per cent, Benue 32.90 per cent, Cross River 36.29 per cent, Delta 6.02 per cent, Ebonyi 79.76 per cent and Edo 11.99 per cent.

Others include Ekiti 28.04 per cent, Enugu 54.13 per cent, Gombe 62.31 per cent, Imo 28.86 per cent, Jigawa 87.02 per cent, Kaduna 43.48 per cent, Kano 55.08 per cent, Katsina 56.42 per cent, Kebbi 50.17 per cent and Kogi 28.51 per cent.
Other states include Kwara 20.35 per cent, Lagos 4.50 per cent, Nasarawa 57.30 per cent, Niger 66.11 per cent, Ogun 9.32 per cent, Ondo 12.52 per cent, Osun 8.52 per cent, and Oyo 9.83 per cent.

Plateau, Rivers, and Sokoto have poverty rates of 55.05 per cent, 23.91 per cent, and 87.73 per cent respectively while Taraba, Yobe and Zamfara recorded 87.72 per cent, 72.34 per cent and 73.98 per cent respectively.
The Federal Capital Territory (FCT) has a poverty index of 38.66 per cent.

Analysts Call for Job Creation, Focus on MSMEs

Reacting to the NBS data, the Head of Research, United Capital, Mr. Wale Olusi, described the latest poverty figure as an improvement on the old data that put about 100 million people as being poor.

“Regardless, 82 million people living below poverty is a staggering number and it tells our policy makers that we still have a long way to go and we still need to do a lot.

“And with the coronavirus pandemic and the outlook for the economy over the next couple of months or years, that number can go higher. If you have devalued the naira and prices go up and more people lose jobs, price of oil collapses continuously for another six months, it simply means that things are likely to get more difficult,” he said in an interview with THISDAY.

But he urged the federal government to focus on job creation to address the situation.

He said: “There is a lot the federal government and the Central Bank of Nigeria are doing, but more importantly they need to create jobs. We need to find a way to convert the abundant human resources Nigeria has.

“Agric still contributes to the economy and it can do up to 50 per cent because of the vast fertile lands we have. The government needs to think of how we can put the bulk of these unemployed people on the farm.

“We can focus on the sector and then select a number of crops we want to specialise in. For example, Cote d’Ivoire and Ghana are the leaders in cocoa production and Nigeria also has an abundant cocoa farming capacity which we can also focus on.

“The future judging by everything happening now is going to be driven by technology, investment in healthcare and education but then again food is not going anywhere and agric is the mainstay of the global economy because human beings have to feed to stay alive.

“We need to invest in education, healthcare, and then agric. We have a competitive advantage in those areas because it can employ more people, produce for the world and it can help reduce this poverty ratio over time.”

The Head of Research, Afrinvest West Africa, Mr. Abiodun Keripe, told THISDAY that the federal government should start its anti-poverty policy with the provision of basic and quality education at the villages and rural level.

This, he added, would significantly reduce the estimated 13 million out-of-school children of which nearly half are girls according to data from the UNICEF.

“On the side, skills development should be encouraged while continually promoting entrepreneurship at the grassroots.

“To support this, there must be an enabling and supportive policy environment, which must be provided by the government alongside the provision of basic infrastructure of electricity, transportation medium, and security. “Ultimately, there must be a conscious attempt at curbing corruption across all levels. This in the least will reduce leakages, which could have been deployed to bringing prosperity to the people,” he said.

However, an economist and Associate Professor at the Lagos Business School, Mr. Bongo Adi, queried the data, but said poverty reduction could only be private sector-led.

Adi said: “The government has failed in many ways and the little resources available to it don’t seem to have been properly utilised. Let stakeholders agree to minimise the shocks and risks on the economy.

“Government has to be sincere and get ready resources to subsidise wage bill for so many of these companies that are huge employers of labour, especially some banks, oil companies and so on because everybody’s back is against the wall.”

Also, Prof. Uche Uwaleke of the Nasarawa State University told THISDAY that although the study indicated an improvement in living standards over time, “more people may have dropped below the poverty line than this survey result suggests.”

He called on the government to capitalise on the survey results and seize the opportunity of the COVID-19 pandemic to pursue pro-poor policies.

He said: “Of note is the use of a consumption expenditure approach rather than income measure, which the NBS justified as being in line with best practice. If the new national poverty line is N137,430 or $361 per person per annum which translates to $ 0.98 per day and captures about 40 per cent of the total population, it tells of considerable improvement over the years.

“The same conclusion can be drawn regarding the Gini index, a measure of economic inequality, which has seemingly improved from over 50 to 35. Be that as it may, given the country’s average growth rate in the last 10 years vis-a-vis population growth rate, it stands to reason that more people may have dropped below the poverty line than this survey result suggests.”

A former Director-General, Abuja Chamber of Commerce and Industry (ACCI), Dr. Chijioke Ekechukwu, predicted an increasing gap in inequality, stressing that the poverty index has been compounded by the dramatic economic downturn.

Also speaking with THISDAY, an Associate Professor of Agricultural Economics at the University of Port Harcourt, Dr. Anthony Onoja, said the development could further weaken aggregate demand in the economy as well as reduce economic growth, leading to a recession.

He said: “Another major implication of this poverty index is its relationship with the food crisis recorded in 2019, especially in conflict zones and the looming famine that the whole country may soon reel into unless adequate and timely policy measures are taken.”
He explained that apart from the impacts of conflicts and insecurity, weather extremes, threatening pests and economic shocks, COVID-19 will likely worsen the country’s poverty index in 2020.