Has Poverty Defected?
Despite the gale of defections witnessed on the political scene last week, the socio-economic problems plaguing the country have remained unabated, indicating that no matter who is in the saddle, the economy remains the key challenge. Obinna Chima writes
Nigeria’s political environment was the cynosure of all eyes last week. This was as a result of the gale of defection by some top politicians from the ruling All Progressives Congress (APC) to the People’s Democratic Party (PDP), as well as pockets of impeachments in some states, ahead of the 2019 general elections.
As expected, the development which appears to be a familiar issue every four year, was the talking point across the country. From the various social media platforms, various newspaper stands and almost every other gathering, the drama in the political scene was the dominant issue.
Interestingly, this was same week that Apple, became a $1 trillion dollar company. The firm which nearly went bankrupt in the 1990s, hit a market capitalisation that’s bigger than the Gross Domestic Products (GDPs) of all but 15 countries in the world, almost same period that in Nigeria, the Central Bank Governor was lamenting that companies in the country do not have access to credit, a major requirement for their survival.
Unfortunately, as the drama in the political environment went on, Nigerians were seen taking sides with same set of political actors that over the years, superintended over their impoverishment and suffering. Indeed, the gap between the haves and the have nots have also continued to widen, in a country where the minimum wage has remained abysmally low at N18,000.
More nerve-wracking was a recent report by the Washington-based Brookings Institution, that revealed that Nigeria had overtaken India as the country with the largest number of extreme poor persons in the world.
According to the report, “At the end of May 2018, our trajectories suggest that Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million.
“What is more, extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall.
“In fact, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today. Already, Africans account for about two-thirds of the world’s extreme poor.”
Aside the Brookings Institution report, the United Nation’s Millennium Development Goals (MDGs) report had stated that while the world had managed to slash the number of poor people by half in the last 20 years, there were more people now in sub-Saharan Africa, including Nigeria, living in a state of extreme poverty and hunger than ever before.
While the level of poverty remains a source of concern to all, the rising state of unemployment is also worrying.
Poverty and unemployment combined are the greatest challenges facing Nigeria, even as the country Misery Index widens.
Even as politicians defect from one political party to another, poverty and inequality have refused to defect from Nigeria and have remained stubbornly high.
Also of concern is the fact that critical sectors in the country have not fared better.
For instance, a comparison of Nigeria’s investment in the education sector with that of other African countries, showed that the country has performed below expectation.
A former Governor of Anambra State, Mr. Peter Obi, had said the problem with Nigeria was that its policy makers still see education as expenditure rather than investment in the future. He added that it had become clear from what countries that invested in education would be expected to reap from their investments.
Citing statistics to buttress his point, Obi said: “South Africa, between 2010 and 2016 spent over five per cent of its Gross Domestic Product ( GDP) on education; Egypt over 3.5 per cent and Nigeria could not even spend one per cent.”
Insisting that poor investment in education produces adult illiterates and makes for low productivity in any nation, he said: “From 2010 to 2014, Nigerian budgeted N1.860 trillion on education, which at the rate of N160 to a dollar was 11.1 billion dollars. In 2015 and 2016, the budget was a total N761 billion, which at the rate of N360 to a dollar was 2.1 billion dollars. As you can see, it means that over a period of seven years, Nigeria with a population of about 190 million people spent 13.2 billion dollars on education.
“South Africa, the second biggest economy in Africa which with a population of 55 million, spent over 15 billion dollars on education in 2015 only and Egypt, the third biggest economy in Africa and with a population of 95 million spent about 12 billion in 2015 only.”
The Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, warned recently about “a looming unemployment crisis in Nigeria.”
According to Rewane, the FDC think-tank had estimated that fourth quarter unemployment figures would spike to 21.5 per cent.
About 4.07 million Nigerians were unemployed between January and September last year, the National Bureau of Statistics (NBS) had revealed. Rewane estimated a population growth of 3.2 per cent for the country, which is higher than GDP growth in Nigeria.
Tackling Poverty
In order to address the rising incidence of poverty in Nigeria, the Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, pointed out that the gale of defections meant that the political economy “is not stable, because we don’t know what is going to happen.”
He added, “If you don’t have political stability, you are going to have problems with the macroeconomic fundamentals going forward.
“My worry is that the politicians are not putting the country first. There is hunger in the country and there is anger and poverty is rising. It is very sad.”
A Senior Lecturer at the Pan Atlantic University, Dr. Bongo Adi, described the scene in the political environment as “same old song.”
According to Adi, “there is nothing new. It is same frenzy of defection that we witnessed in 2014, as a prelude to the 2015 elections.
“So, the same cycle is repeating itself. It what is called the dead-weight ideology. So, if there is anything this wave of defection has thought any right-thinking Nigerian, it is that all that the political class is interested in is their own personal and individual survival.”
He added, ”These are same people who got into the system and met it bad, but failed to improve the system. So, we can see that, this is an escapist mechanism that is being adopted by these politicians.
“So, it is not for the betterment of the lots of the suffering masses. It is only about grabbing power, while Nigerians become poorer.
“They moved from PDP to APC in 2018 because they felt that PDP wasn’t doing well and these same people who impoverished Nigerians beyond measure in the past three years, where the Misery Index has gone to an all-time high and poverty has increased significantly, are the same people moving back to the PDP.
“Unfortunately, the people have been so impoverished materially and mentally, to the point that they don’t care.”
On his part, a research analyst at Anchoria Asset Management Limited, Mr. Adedeji Adewole, said the focus of governments at all levels ought to be “how to ensure sustainable development.”
“There is already a diversion in the focus of the government towards the political space and everybody wants to just get re-elected.
“And because of the re-election bid, that is why we have seen the exodus of people from APC to PDP. So, the government has already lost focus,” he said.
Head of Fixed Income at Chapel Hill Denham, Dipo Ajayi, noted that the development would further discourage foreign investors in the country.
“Before now we could categorically say who would likely become the president in 2019, but now, its dicey. “And what that does to the market is the foreign investors would actually want to stay back to see what would happen in 2019,” he said in an interview on CNBC Africa.
Therefore, there is need for Nigerians to continue to hold their elected political officers accountable to put the economy on a sustainable growth path.