With­out re­forms Nige­ria will har­bour 25% of world’s ex­treme poor by 2030 - World Bank

Business Day (Nigeria) - - FRONT PAGE - ONYINYE NWACHUKWU & CYN­THIA EGBOBOH, Abuja

Un­less the govern­ment quickly em­barks on needed re­forms, the num­ber of Nige­ri­ans liv­ing in ex­treme poverty could in­crease by more than 30 mil­lion by 2030, push­ing the coun­try to ac­count for 25 per­cent of world’s ex­tremely poor pop­u­la­tion, the World Bank warned on Mon­day.

The World Bank gave the warn­ing in its Nige­ria Eco­nomic Update launched in Abuja.

An es­ti­mated 100 mil­lion Nige­ri­ans cur­rently live on less than US$1.90 per day. Close to 80 per­cent of poor house­holds are in northern Nige­ria, while em­ploy­ment cre­ation and in­come gains have been con­cen­trated in cen­tral and south­ern Nige­ria.

“Eco­nomic and de­mo­graphic pro­jec­tions high­light the ur­gent need for re­form,” the bank noted.

Pop­u­la­tion growth is es­ti­mated at 2.6 per­cent, out­pac­ing eco­nomic growth in a con­text of weak job cre­ation, while per capita in­comes are fall­ing.

“The ‘cost of in­ac­tion’ is sig­nif­i­cant. Un­der a busi­ness-as-usual sce­nario, where Nige­ria main­tains the cur­rent pace of growth and em­ploy­ment levels, by 2030 the num­ber of Nige­ri­ans liv­ing in ex­treme poverty could in­crease by more than 30 mil­lion, and Nige­ria could ac­count for 25 per­cent of world’s ex­tremely poor pop­u­la­tion,” the bank stated.

In the re­port, the bank noted that build­ing re­form mo­men­tum is es­sen­tial to mit­i­gate risks and pro­mote faster, more in­clu­sive, and sus­tain­able growth that im­proves liv­ing stan­dards and re­duces poverty.

Ro­bust growth and job cre­ation will re­quire strength­en­ing macroe­co­nomic man­age­ment while in­creas­ing fis­cal rev­enues to at­ten­u­ate the im­pact of oil-sec­tor fluc­tu­a­tions and ad­vance much­needed in­vest­ments in hu­man

cap­i­tal and in­fra­struc­ture, it said. This edi­tion of the Nige­ria Eco­nomic Update (NEU) dis­cusses se­lected re­form ar­eas, in­clud­ing lever­ag­ing trade in­te­gra­tion to har­ness the ben­e­fits of the Africa Con­ti­nen­tal Free Trade Area; im­prov­ing ba­sic ed­u­ca­tion fi­nanc­ing to im­prove hu­man cap­i­tal out­comes; mon­i­tor­ing the im­pact of con­flict on house­hold’s wel­fare to pro­tect the poor and vul­ner­a­ble; and lever­ag­ing dig­i­tal tech­nolo­gies to di­ver­sify the econ­omy and cre­ate jobs for young work­ers. Re­forms in these and other ar­eas would en­able Nige­ria to strengthen its macroe­co­nomic re­silience and pro­mote pri­vate sec­tor re­silience. The re­port ti­tled “Jump­start­ing In­clu­sive Growth: Un­lock­ing the Pro­duc­tive Po­ten­tial of Nige­ria’s Peo­ple and Re­source En­dow­ment” notes that Nige­ria’s labour force is grow­ing rapidly, as over 5 mil­lion Nige­ri­ans en­tered the labour mar­ket in 2018, re­sult­ing in 4.9 mil­lion more un­em­ployed peo­ple in the last year. Ac­cord­ing to the re­port, be­tween the first quar­ter of 2017 and the first quar­ter of 2018, 10 states saw some pos­i­tive job cre­ation, but the num­ber of new jobs was not enough to ab­sorb the new en­trants into the labour force. The sit­u­a­tion im­proved by the third quar­ter of 2018 as four states (La­gos, Rivers, Enugu, and Ondo) cre­ated more jobs than the en­trants to the labour mar­ket, and as a re­sult re­duced un­em­ploy­ment. Marco Her­nan­dez, World Bank lead economist, speak­ing at the launch of the update in Abuja, stressed that Nige­ria’s econ­omy has re­mained vul­ner­a­ble to ex­ter­nal and do­mes­tic risks with the ab­sence of struc­tural re­forms. This is as the econ­omy is con­fronted by the sharper-than-ex­pected slow­down in the global econ­omy as well geopo­lit­i­cal and trade ten­sions. “Do­mes­ti­cally, the main risk is as­so­ci­ated with the de­gree of pre­dictabil­ity of macroe­co­nomic poli­cies, the pace of struc­tural re­forms, and the coun­try’s se­cu­rity sit­u­a­tion. The econ­omy’s sen­si­tiv­ity to volatile oil mar­kets is a ma­jor cause of un­cer­tainty and a dis­in­cen­tive to long-term in­vest­ment,” Her­nan­dez said. Her­nan­dez said that though the econ­omy has recorded growth, it is not as fast as ex­pected as it can­not meet the need of the na­tion’s pop­u­la­tion, em­pha­sis­ing the need for the govern­ment to help the pri­vate sec­tor to cre­ate job. “Build­ing re­form mo­men­tum is es­sen­tial to mit­i­gate risks and pro­mote faster, more in­clu­sive and sus­tain­able growth that im­proves liv­ing stan­dards and re­duces poverty,” Her­nan­dez said. “Ro­bust growth and job cre­ation will re­quire strength­en­ing macroe­co­nomic man­age­ment while in­creas­ing fis­cal rev­enues to at­ten­u­ate the im­pact of oil-sec­tor fluc­tu­a­tions and ad­vance much-needed in­vest­ments in hu­man cap­i­tal and in­fra­struc­ture.” He fur­ther said the pro­duc­tiv­ity gap be­tween Nige­ria and com­para­tor coun­tries re­flects both its lower rel­a­tive stocks of phys­i­cal and hu­man cap­i­tal and the in­ef­fi­ciency with which in­puts (cap­i­tal and labour) are trans­formed into out­puts. Shub­ham Chaud­huri, World Bank coun­try di­rec­tor for Nige­ria, in his re­mark said the re­port is aimed at pro­mot­ing ways to boost the pro­duc­tiv­ity and re­silience of the Nige­rian econ­omy, as well as in­creas­ing pro­duc­tiv­ity which is vi­tal to sup­port ro­bust growth and job cre­ation in the coun­try. “Build­ing on re­cent ef­forts, go­ing for­ward we rec­om­mend ac­tions in pri­or­ity ar­eas, in­clud­ing in­creas­ing fis­cal rev­enues and im­prov­ing the qual­ity of spend­ing to man­age oil-sec­tor volatil­ity, in­vest­ing in much­needed hu­man cap­i­tal and in­fra­struc­ture, and im­prov­ing the busi­ness cli­mate to un­lock pri­vate in­vest­ment and tackle Nige­ria’s jobs chal­lenge,” Chaud­huri said. “Lever­ag­ing trade in­te­gra­tion to har­ness the ben­e­fits of the Africa Con­ti­nen­tal Free Trade Area; im­prov­ing the ef­fi­ciency of spend­ing in ed­u­ca­tion; mon­i­tor­ing the im­pact of con­flict to pro­tect the poor and vul­ner­a­ble; and lever­ag­ing dig­i­tal tech­nolo­gies to di­ver­sify the econ­omy and cre­ate jobs for young work­ers are ways to boost pro­duc­tiv­ity and re­silience in the econ­omy,” he said. Chaud­huri said while Nige­ria has achieved con­sid­er­able progress in boost­ing in­come levels and liv­ing stan­dards, it has not yet man­aged to reach a con­ver­gence path with ad­vanced economies. He stressed the ur­gent need to cre­ate jobs by ef­fec­tively max­imis­ing the avail­able re­sources, hu­man cap­i­tal and in­fra­struc­ture as well as en­sure en­vi­ron­ment con­ducive for en­trepreneur­s and in­vestors thereby un­lock­ing the pri­vate sec­tor fi­nanc­ing. Tunde Fowler, ex­ec­u­tive chair­man, Fed­eral In­land Rev­enue Ser­vice (FIRS), said the re­port points to the need for col­lab­o­ra­tion among the state and fed­eral gov­ern­ments re­gard­less of the con­sti­tuted in­de­pen­dent na­ture of states. ”Nige­ria has been the first mar­ket in Africa as it is a con­sumer econ­omy, but we need to change this nar­ra­tive and take ad­van­tage of our re­sources, both cap­i­tal, land and hu­man re­sources to cre­ate the econ­omy we de­sire,” Fowler said. “The Fed­eral Govern­ment can­not do it alone. If we have more co­op­er­a­tion among the fed­eral and state gov­ern­ments, we would achieve more growth in the near­est fu­ture.” Abubakar Atiku Bagudu, gov­er­nor of Kebbi State, said the re­port which speaks to the need to en­sure in­clu­sive growth in Nige­ria brings out the quan­tum of chal­lenges in the coun­try and the need to mo­bilise and make ef­fec­tive use of its re­sources. “It is im­por­tant for the govern­ment to pro­mote poli­cies that will re­ward the hard work of our hard­work­ing men and women in the var­i­ous sec­tors. This will de­liver value to ev­ery­one,” he said. Bagudu said that cri­sis and in­sur­gen­cies recorded across the coun­try have to do with lack of in­clu­sion, adding that the govern­ment as well as all de­vel­op­ment bod­ies should pro­mote pro­grammes that would boost in­clu­sion across the coun­try.

ijo: bbenezer Onyeagwu, group man­agj ing di­rec­tor/ CEO, Zenith Bank; Baba­jide Sanwo-olu, gov­er­nor, ia­gos ptate; Jim Ovia, chairj man, Zenith Bank; lkezie Ik­peazu, gov­erj nor, Abia State, and Adaora Umeoji, deputy man­ag­ing dij rec­tor, Zenith Bank plc, at the grand fi­nale of the ‘Style By Zenith 2.0’ iifestyle cair in ia­gos.

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