There is little the government can do to prevent more Nigerians from further sinking into economic hardship, considering information from the National Bureau of Statistics (NBS), experts say.
The NBS on Monday, May 4, released the executive summary of the 2019 Poverty and Inequality report, where it stated on that 82.9 million Nigerians (40.1 per cent) live below the country’s adopted poverty line of N137,430 per year.
This figure was based on the Nigerian Living Standards Survey conducted between September, 2018, and October, 2019.
It is noteworthy that the NBS assessment of how many Nigerians are poor is modest compared to the latest figures from the World Poverty Clock, which estimates 102.4 million Nigerians (50 per cent) live in extreme poverty. The clock uses a poverty threshold of 1.90 dollars (N740) as against the NBS’s 0.97 dollars (N377).
According to the bureau, the official poverty line is how much a person needs to spend on food and other items, such as clothing, housing, education and healthcare, to have a “basic level of welfare”.
While the food poverty line is N81,767 per year, the cost of non-food basic needs is estimated at N55,663.
The report also shows that poverty is a much bigger problem for rural communities where up to 52.1 per cent are considered poor compared to the urban area’s 18 per cent.
Speaking to HumAngle, Dr Olaolu Olayeni, Assistant Professor of Economics at Obafemi Awolowo University, said the implication of the report was that more people were taken out of the middle class, which is the backbone of the economy. He also said with the ongoing COVID-19 pandemic, more Nigerians would lose their sources of income and fall below the poverty line.
“Companies are out to make profit and profit depends squarely on economic activities. If the economy is booming, we expect that the profit will also rise, and it is on this basis they are able to cater for their workers. If that is not there, the implication is we begin to see more and more people becoming jobless.
“Workers in Nigeria have so many dependents and it means those people depending on them will also be affected,” he said.
Nigeria will experience a sharp decline in revenue as a result of the fall in the price of oil, which accounts for 86 per cent of the country’s total exports revenue, he stressed.
As a result of this, not only will direct employees of government be affected, companies executing government contracts may also experience contract cancellations or payment delays, Olayeni said.
Also, investments in the oil industry will be affected which will have a ripple effect on cash reserves in the banking sector, he pointed out.
“At the end of the day, the implication of COVID-19 is that it is going to amplify the existing poverty structure that we have.
“Even among the people who live below one dollar per day, we still have inequality among them, meaning there are people who are in extreme poverty.
“COVID-19 has only come to amplify what we know already and it is unfortunate because we should have addressed this before now. And today, we are paying dearly for the mistakes of the past,” Olayeni added.
The economics lecturer said the focus of Nigerians should be how they would help themselves better cope with the harsh realities and gloomy economic prospects.
This is because the government is cash-strapped and there is little it can do, he said.
“Even Saudi Arabia is putting in austerity measures.,” he said, adding: “It has stopped the usual monthly stipends it used to give citizens and increasing taxes.
How much more a country like Nigeria that does not have savings it can fall back on in a difficult time like this?
“As individuals, you can think of what you can do to ameliorate the effects. It doesn’t mean you are going to create a new job, but if you have some money, try to be more prudent in spending and use that to buy time. If this trend continues, in the next six months, we will have biting poverty in Nigeria.
“We should expect worse times to come. We have not seen the worst now. If we have the means, we should make sure we don’t overspend this time around. And if you are going to spend, spend judiciously. Spend in a manner that will not affect your wellbeing at a later time,” Olayeni advised.
Olarenwaju Olaniyan, a Professor of Economics and Director of the Centre for Sustainable Development at the University of Ibadan, said there was very little the government could do to tackle poverty at the moment because of uncertainty in the economy.
He said it is was a period for reflection about investing in human capital development and urged the government to improve the health and education sectors and also ensure young people acquired skills and learn the ropes of entrepreneurship.
“The government must provide room for people to get decent jobs so that people are able to consume what they need and are also able to save for the future ㅡ because the sustainability of any country is in the ability of those who are productive to be able to save enough to take care of themselves when they grow old,” he said.
Olaniyan added that Nigeria needed to deal with the problem of overpopulation and the lack of credible data to support development planning.
“People say that every minute seven people fall into poverty in Nigeria but the information they don’t give is that every minute 15 children are born in Nigeria,” he pointed out.
“So, supposing that many people fall into poverty every minute, it is because 15 people are born in Nigeria, many of them into poor households,” Olaniyan said.