BUSINESS Nigeria: A rich country with poor people?
Within the last few days, there were two ratings on Nigeria. The first was from the World Bank President, Mr Jim Yong Kim which placed Nigeria among the extremely poor countries. A few days later the federal government released the rebasing of the country’s GDP which placed it as Africa’s biggest economy ahead of South Africa and 26th in the World.
These two ratings have generated controversy and attracted several comments from within and outside the country. Depending on how we look at the ratings, each has its basis. In the first place, there is no doubt that Nigeria is blessed and its economy is growing fast based on available indices and statistics. Also, one can testify to the fact that the economy is growing taking into consideration the emerging sectors such as entertainment, housing and information technology industries.
However, at the same time the country’s poverty rating is also growing and this can be testified based on both global rating and the situation on ground. Just as the economy is booming, poverty is also escalating due to recent events such as high population, poor electricity to support small scale industry, importation of all sorts of items from Asia that kill local industries and the insecurity in the northern part of the country which has denied many people their means of business and livelihood.
The World Bank President, who spoke last week at the Council on Foreign Relations (CFR)
Source: NBS in Washington, said that the global bank would deal with the extreme poverty in Nigeria and its counterparts in the coming years.
According to him: “The fact is that two-thirds of the world’s extreme poor are concentrated in just five countries: India, China, Nigeria, Bangladesh, and the Democratic Republic of Congo. If you add another five countries, Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya, the total grows to 80 per cent of the extreme poor.”
Although Finance Minister Dr Ngozi Okonjo-Iweala didn’t totally disagree with the World Bank chief but she said the number of poor people in a country irrespective of the country’s level of development was the parameter used to rate Nigeria among nations with high poverty level.
According to her, the phenomenon of large number of poor people is peculiar with middleincome countries to which Nigeria belonged.
``India, a middleincome country, one of the largest economies in the world like Nigeria, is a big economy, but the largest number of poor people in the world reside in India, China and other places.
``Most middle-income countries, including Brazil have large number of poor people that is the reality of today and Nigeria is no exception,” she said.
Okonjo-Iweala said at the rebasing of the GDP event that one of the key changes identified is the noticeable shift in the share of key sectors to the country’s overall GDP.
The rebasing exercise was more comprehensive than previous ones as the number of economic activities reported in the GDP computation framework increased to 46 compared to 33 in the previous series. Other activities which were included in the computation framework are entertainment, research, patents and copyrights.
Report released by the National Bureau of Statistics in 2012 showed that despite the fact that the Nigerian economy is growing, the proportion of Nigerians living in poverty is increasing every year as shown in the accompanying table.
The proportion of the population living below the poverty line increased significantly from 1980 to 2004.
The above statistic corroborates the claims by the two parties that although Nigeria is rich and the economy is growing, still majority of its population are poor. These two statistics have posed a great challenge to the managers of the economy. It is high time officials stopped relying on figures but devise means to work hard and ensure that the growth witnessed by the economy is all inclusive.