23

Mar

AT LAST A WORLD ‘TROPHY’ FOR NIGERIA! 02072018

2018-07-02

Nigerians, recently, lamented the way their darling, Super Eagles, crashed out of the on-going World Cup in Russia. Nonetheless, the well known Nigeria penchant, for always daring to stand out, ‘at any cost’, may have been embellished, by last week’s announcement that Nigeria, has overtaken India, as Number One, in the World’s Poverty Ratings; reportedly, out of Nigeria’s estimated total 170 million people, alarmingly, close to 50 percent are deemed as extremely poor. 

Infact, a recent report, based on the ‘World Poverty Clock’, by the Brookings Institution, shows that Nigeria now has over 87 million people living in abject poverty.  Incidentally, the ‘World Poverty Clock’ was created by, Data Lab, a Vienna based NGO, funded by the German Government, to monitor real time poverty data, across over 100 countries. Indeed, the Brookings’ 2018 Q1 projections show that “Nigeria has already overtaken India, which has 73 million poor people, as the country with the largest number of extremely poor worldwide. 

Notably, Brookings Institution, is a Washington DC based, “nonprofit public policy organization, which conducts in-depth research, that leads to new ideas for solving social problems at the local, national and global levels”; the Institute’s recent report, ranks the World’s countries, according to their Gross Domestic Product, based on their respective Purchasing Power Parity, per Capita; (this simply means that, the total value of goods and services, produced nationally, is divided by the total population, while the value of that product, is defined by the relative purchasing power parity of the National currency). 

What is clearly, worrying, from the report, is that “extreme poverty is growing in Nigeria by six people every minute, while poverty in India, conversely, continues to fall. The report, also noted that “by December 2018 (6 months hence), an estimated 3.2 million, more people, will join the poverty ranks in Africa.

Nonetheless, Nigeria’s Minister for Trade and Investments, Okechukwu Enelamah told State House Correspondents, after the Federal Executive meeting, on Wednesday June 27 2018,  that the indices used in arriving at the report’s conclusions ‘might’ have been compiled when Nigeria was in economic recession (i.e. between August 2016 - September 2017).

The Minister, therefore, advised that “Nigerians need not lose sleep because of the report”.  Conversely, Enelamah  urged the Press Corp, to “remember, that if you are in a recession, what it means is that, though your population is growing, people don’t stop procreating, your growth ‘factor’ (‘falters’), which means that in theory, depending on how they run the numbers, you will be going the other way”. 

The Minister, probably, would have avoided his convoluted explanation, if he had the courage to confront the truth, by simply checking out the parameters, including the timing and assumptions which predicated the damning report in the first place.

Instructively, however, according to the Brookings Institution, each April and October, the ‘World Poverty Clock Data’ are updated, to take into account, new Household Surveys (including an additional 97 surveys made available in April 2018) with new projections on each country’s economic growth, culled from IMF’s World Economic Outlook. Apparently, such data, “form the basic building blocks, for poverty trajectories, computed for 188 countries and territories, both, developed and developing, across the World”; the Brookings study also found that, extreme poverty in today’s world is largely about Africa!!”, and that Africans presently, account for about two thirds of the World’s extreme poor; the report therefore warns that if current trend persists, they (Africans) will ultimately account for 90 percent of the world’s poor by 2030!!
Nonetheless, despite the usual unfounded optimism of government functionaries, should, Nigerians accept the Honorable Minister’s rejection of the odious verdict of Nigeria’s pole position amongst the World’s poorest?

Incidentally, CIA World Factbook sources, suggest that the number of Nigerians presently living on less than the International poverty baseline of $1.90/day, has steadily grown from 34 percent  between 1992-99 to 60 percent (2000-6), 70 percent (2007–10), 60 percent  (2011–16) to 67 percent by 2018 (https://www.indexmundi.com/g/g.aspx?c=ni&v=69). Notwithstanding in 2016, our own, National Bureau of Statistics had infact, reported that no fewer than 112 million Nigerians live below the poverty line.

In reality, the average Nigerian, readily regrets that life has not only progressively become “tougher” over the years, but survival has certainly become much more challenging lately, with well over 30 million ‘professional’ job seekers, and millions of Children deprived of formal education, and the necessary skills, to earn a living and remain useful, rather than constitute an oppressive public burden, with a potentially, parasitic and disruptive force on national security and the economy. Furthermore, Bill Gates, the accomplished International Philanthropist, who has already sunk over $1bn into critical health, related interventions in Nigeria, also noted, with dismay, during his recent visit to Nigeria,  that “per capita GDP will decline, if current education and health trends continue, with flat per capita growth”; ultimately according to Gates, “economic growth may, not match a concurrent higher population growth rate” (see “Bill and Melinda Gates: Thank you for your love for Nigeria” www.betternaijanow.com).

Nigeria, will undoubtedly have to contend with the issue of population control, particularly, if Nigeria’s GDP continues to be sluggish, relative to population growth. Curiously, however, even a casual appraisal, will clearly testify that, deepening poverty has, existed inexplicably, simultaneously, with rising balance of payments surplus and relatively bountiful foreign reserves; thus, we have become inexplicably poorer, whenever Nigeria’s dormiciliary account becomes increasingly buoyant! Thus, the richer we become in foreign currency, sadly, the poorer our people become; in this event, it is arguable, therefore, that even a 50 percent drop in population growth rate, as often recommended, may only have a marginal amelioratory impact on the poverty level. 

Similarly, the more dollars CBN claims to have as reserves, the greater, ironically, seems to be, the pressure on Naira exchange rate. For example, between 1995-8, the Naira rate remained at N80=$1 with only $4bn reserves and barely 4 months imports cover;  conversely, Naira has, inexplicably, steadily depreciated, despite an exceptionally buoyant reserve base and significantly extended imports cover for most of the years, such that our own CBN is endlessly encouraged to willfully sell dollars to all and sundry, including BDCs at face value, even when our government, still goes cap in hand to borrow the same dollars, externally, at cut throat international rates for such sovereign debt.

Regrettably, weaker naira exchange rates are, counterproductive as they drive, higher fuel prices and subsidies values, while the resultant double digit inflation rates, will further squeeze consumer demand and propel higher cost of borrowing for businesses; ultimately a collateral reduction in domestic production, will result, with an adverse shrinking impact also on employment opportunities.

So, where do we then go from here? Surely, with an International poverty base of $1.90/day, more Nigerians will still earn below poverty wages, even if N65000 becomes the new minimum wage. 

Invariably, 50 percent of Nigeria’s population and certainly well over 100 million of the next generation will live their lives in abject poverty, if the purchasing power of the majority of Nigerians continues to shrink. Instructively, the Brookings poverty ranking, is based on per capita purchasing power of a country’s GDP i.e. how much would each person get, if the GDP is shared equally amongst the total population, while the per capita domestic value is expressed as the purchasing parity value of an International currency, such as the dollar; consequently, the weaker the applicable Naira exchange rate, the poorer Nigerians will become. 

Unfortunately, even if crude price, unexpectedly, approaches $200/barrel, the Naira rate, will still as witnessed in the past, remain under pressure; a horrendous paradox indeed. Sadly, this horrid reality will persist, so long as the Naira rate is habitually determined in auctions of dollar rations, in a domestic money market that CBN will not deny is eternally, deliberately flushed with surplus Naira!

SAVE THE NAIRA, SAVE NIGERIANS!!!