In layman’s terms, poverty is seen as the inadequacy of financial means to sustain a needed standard of living or to afford the necessities of life. Now largely tagged a global phenomenon and a state of emergency, previously, poverty was restricted to defined territories and a people. However, this has now been overly properly dimensioned as it is known that even in developed nations of the world, poverty exists.
Today, the first goal of the United Nations Sustainable Development Goals seeks to end poverty in all forms everywhere. There has been a prior understanding of nations of the world in a pact signed under the Heads of Nations in June 1998. It was collectively agreed that poverty is a “denial of choices and opportunities, a violation of human dignity.” Also, several dimensions of poverty have been identified, especially that of the World Development Report of 2000/2001. There, poverty was summarised as “a lack of opportunity, lack of empowerment, and a lack of security.”
In 2020, the World Bank using a benchmarked poverty threshold of $3.20 per day put Nigeria’s poverty rate at 71 per cent. The incursion of the poverty malady while not restricted to Nigeria is more pronounced recently in most developing nations as they are being faced with dwindling economic growth on the backdrop of Russia’s invasion of Ukraine which has instigated inflationary pressures and an adverse climate change that has put sustainability on the backburners.
More relatable is the scourge of unemployment which has accounted for the rising poverty levels in Nigeria. With the youth unable to find gainful employment, there are reduced income levels, low investments, and dwindled standard of living. Typically, underemployment has been a bane in the Nigerian economy as wages are not in tandem with years of experience and skills. Corruption is also a key influence for reduced poverty in recent years as resources meant for development are embezzled and diverted away from productive uses where they would have in fact benefited the economy and the people. Crude oil remains the mainstay of the Nigerian economy and with agriculture recently contributing increased levels to the Gross Domestic Product, there is a chance that more youths find work in other sectors and across industries.
The manufacturing sector which should be the highest contributor of level is unable to take its rightful place due to a harsh business climate and lack of infrastructural amenities. The share of agriculture to GDP rose from 23 per cent in 2015 to 26 per cent in 2021, while manufacturing declined from 9.5 per cent to nine per cent respectively. With a weak manufacturing base comes the challenge of the inability to garner enough foreign exchange and income for the economy. Also, the financial sector has been hampered by a foreign exchange crisis with the naira depreciating to all-time lowest levels. This has accentuated poverty in the economy with the middle and high class also affected as more naira is paid to secure the dollar and other foreign currencies.
Income inequality poses a real challenge to poverty eradication just as a poor education system and reduced literacy, especially at basic levels, have hindered the capacity of Nigerians from having access to the needed information that will trigger innovation and the right consternation of technological inventions. Exposure to external shocks seems to have been the greatest hindrance to the ability of the Nigerian economy to put to good use her capacity for development. With the COVID-19 pandemic came a global shockwave that slowed down growth resulting in a triple effect of job losses, death, and economic recession and depressions in several economies due to the promulgated lockdown. Post COVID, economies including Nigeria have had sluggish growth, and legacy factors like the labour divisions and disparity in wage and economic exigencies have also resulted in more people being plunged into poverty.
Weak governance, inconsistent policy climate, and the existence of bottlenecks that have stifled entrepreneurship and investment have not helped to increase the income equality levels and move more Nigerians out of the poverty trap.
Thus, if Nigeria is to aptly tackle poverty headlong, more attention will need to be paid to the above causes with global shocks, corruption, infrastructure, and education prioritised to guarantee an entire state of wellbeing and a high standard of living.
- Peter Imouokhome is an economist and development consultant