129 million Nigerians living below poverty line, says World Bank — Business — The Guardian Nigeria News – Nigeria and World News

* Your reforms are causing pains, Bauchi gov slams Tinubu
* Cardoso explains why CBN will sustain monetary tightening
* Says CBN stopped creating fresh W&M facilities

The share of Nigerians living below the national poverty line has risen from 40.1 per cent in 2018 to 56 per cent as of this year, the World Bank has said.

In its 2024 Nigeria Development Update (NDU) released yesterday, the Bank puts the actual number of Nigerians in poverty at 129 million.

The report noted that with growth proving too slow to outpace inflation, poverty has risen sharply, adding: “Since 2018, the share of Nigerians living below the national poverty line is estimated to have risen sharply from 40.1 per cent to 56.0 per cent. Combined with population growth, this means that some 129 million Nigerians are living in poverty. This stark increase partly reflects Nigeria’s beleaguered growth record.”

The Bank stated that with growth proving too slow to outpace inflation, poverty has risen sharply.

Rehashing data that had been stressed too often by National Bureau of Statistics (NBS) reports, the report observed that large increases in prices across almost all goods have diminished the purchasing power of the working population.

At the report unveiling, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, also confirmed that the government has exited every form of fuel subsidy.

He disclosed that with market forces determining the prices of petrol, which has triggered high prices of goods and services, the Federal Government is engaging labour unions on how to alleviate the additional economic burden birthed by the removal.

On his part, the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, said recent happenings in the economy justify the decision of the Monetary Policy Committee (MPC) to maintain its tightening pace.

The World Bank Country Director, Nigeria, Dr. Ndiame Diop, warned Nigeria against aborting the ongoing economic reforms, insisting that the government is on the right track with its bold steps to redirect the economy.

The Vice President of the World Bank Group, Indermit Gill, submitted that Nigeria is too good to depend on just one commodity for export.

He acknowledged the significant achievements in getting the monetary policy right but noted that “one leg alone cannot move a car”.

“I would liken Nigeria with a car with all the tyres deflated, now that you have been able to inflate one tyre, you still cannot move the car until the other three tyres are inflated,” he said.

He called for collaboration between all the authorities to ensure holistic growth and development.

The report warned that with the young population on the increase, there is the possibility of the population turning into a disaster.

It added: “Harnessing the potential for such a demographic dividend requires urgent action to invest in human capital and create higher productivity jobs.”

The report noted that the government must introduce poverty-reducing labour market policies, saying in the next 10 years, the number of 15 to 24-year-old Nigerians will increase by more than 12 million.

If urgent steps are not taken, the report highlighted, the young population could spell doom for Nigeria.

“The lack of productive jobs not only constrains inclusive growth and poverty reduction; it also risks squandering the potential of young Nigerians’ ambitions and could fuel conflict. Most young Nigerians aspire to work in professions such as accountancy, civil service, medicine, engineering, and teaching. They are also optimistic, with around 8 in 10 15-25-year-olds believing that it is likely or very likely that they will one day attain the dream job to which they aspire. Failing to harness these ambitions and this optimism represents a waste of young Nigerians’ potential. Worse still, it could drive frustration and even conflict,” it stated.

According to the report, most jobs available in Nigeria do not allow workers to escape poverty.

The report also captured the advantage children of the rich have in obtaining jobs as against those whose parents are in the lower rung of the social ladder.

It said: “Among employed people, the share of those who hold wage jobs is around double for those from households in the top 60 per cent of the consumption distribution compared to those in the bottom 40 per cent. This could reflect the fact that obtaining a wage job helps boost household income, but also those coming from richer households have higher levels of education and human capital, which may help them obtain a wage job in the first place. Either way, wage jobs are at least associated with exiting poverty.”

It also observed that despite the labour market changing, work is shifting from agriculture to services but does not necessarily raise productivity and earnings.
It noted that the share of Nigerian workers engaged in agriculture dropped from about half in 2000 to just over a third by 2021 with services comprising more than half of Nigerian jobs.

This echoed the overall shift in economic activity from agriculture to services. Women and young people have raw deals when looking for jobs in Nigeria, the report finds.

It disclosed that lower labour market engagement from women may cause Nigeria to miss out on a large part of its demographic dividends and misallocate its resources.

Cardoso pointed at the positive impact of a falling naira.

He said: “Lower exchange rate should encourage exports. If you look at the competitiveness of products as a result of exchange rates, our goods will become a lot more competitive. I also believe that the exchange rate discourages massive imports that we do not need. The foreign exchange helps to direct our preferences and it helps to make choices for us that we perhaps should have made.”

While he argued that it is important that the central bank keeps its focus on orthodox monetary policy and stays away from quasi-fiscal interventions, Cardoso admitted that the bank’s interventions in various stages of completion would be allowed to run their course.

“Our current monetary stand is a tightening one. Yes, it may appear in some cases a little bit on the hockey side. I want to refer to the very last MPC that we had. At that time, the expectation was that the MPC would not touch interest rates. But the committee, in its wisdom, unanimously decided to take up interest rates. The truth of the matter is that if we didn’t take the preemptive step of doing what we did, then with what we are seeing right now, I can assure you it would have been a lot worse. Yes, inflation has gone up a little bit, but we had projected looking ahead that this was going to happen and that it was important for us to be timely enough and take the preventive step to minimise the impact,” he explained.

On the controversial ways and means, he maintained that the apex remains firm on exiting as a finance source of the Federal Government.

“I am very pleased that the Minister of Finance himself has said that ways and means is not a source of funding the government is looking at. I am pleased that we have moved away from that,” he said.

Edun said the government is aware that it is not going to be easy and that a lot of efforts are needed to revive the economy. He promised that what the government is doing is to keep the economy stable.

He also noted that the real growth will come from agriculture and the government is putting more energy in that direction.

While Edun said exiting the subsidy was a good move by the government as it guarantees more money to the federal, state and local governments, the governor of Bauchi state, Bala Mohammed, said such additional money is a fantasy as the current administration’s reforms are causing pain and hardship to the citizenry.

“The reforms introduced by this government are causing pain to the people. We love closer to the people and I can tell you that our people are suffering. Yes, we get more money, but it is not enough to provide the needed infrastructure. Now there is a new minimum wage, which the governors are obligated to pay. Beyond evaluating numbers, we must be able to reverse policies that are not working,” he said.

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