There's aid, technology, and policy, but there's no reduction in the poverty rate; What's the way forward for Nigeria?

People’s well-being and standard of living are at the forefront of any economic intervention. The standard of living in any economy can be viewed through the lens of poverty or prosperity in the land. Therefore, when there is not much transformation within the conduit of poverty reduction, it becomes a paramount concern for all who care. This has become a concern in Nigeria over and over again. A recent report showed that Africa is home to the largest number of people living in multidimensional poverty, with approximately 534 million of its 1.1 billion people (UNDP, 2023).

Nigeria, the most populous black nation in Africa, contributes largely to the poverty figures in Africa. According to the World Bank (2024) databank, multidimensional poverty in Nigeria has moved from 53.70% to 63% between 2017 and 2022. Meanwhile, the Global Economy (2022) data shows that Nigeria received over USD 16.7 million in foreign aid assistance between 2017 and 2021. Data like these are enough to support Dambisa Moyo’s assertion that “foreign aid is behind the poverty rise in Africa” in her book “Dead Aid.” However, that assertion cannot be held completely true at face value because, despite technological advancement and policies contributing to the prosperity of developed Nations, their presence in Africa is not also the cause of poverty.

Technology has been a major player in poverty reduction in many countries or regions that have experienced improvement. Technological advancement has penetrated Nigeria's economy; however, it has not been able to influence the country's poverty rate. In the same vein, policies and programs have been enacted to combat poverty, like the National Poverty Eradication Programme (NAPEP), Operation Feed the Nation (OFN), Green Revolution, Better Life for Rural Women, Family Economic Advancement Program (Aibieyi & Dirisu, 2010). Yet, these projects fail to achieve optimal results.

WHAT EXACTLY ARE THE PROBLEMS AND WHAT IS THE WAY FORWARD?

It is true that despite significant aid, technology, and policy efforts, poverty reduction in Nigeria and Africa at large remains a complex challenge. While these factors can be instrumental, a multifaceted approach is needed to achieve sustainable progress. Attention needs first to be given to what are the likely problems causing this increase in the poverty rate in Nigeria. Here are some key identifiable problems:

Diversification: Over-reliance on primary commodities like oil and minerals makes economies vulnerable to price fluctuations. Economies like Nigeria that need to diversify are also vulnerable to external shocks (World Bank, 2017). Diversification has been observed as a major challenge for low-income economies, primarily the ones dominated by commodities and minerals. These impede the potential for more job creation and more export trades. However, beyond the former, enhancing the benefits from their endowment and equitably sharing it transparently with citizens has been a major challenge.

A suggested way forward would be for Nigeria to embrace diversification actively beyond just making statements about it. These would be possible when effective policy reforms are enacted to provide a convenient investment climate and a form of reallocation of resources to new activities (Alshamsi et al., 2019) from dying sectors. Channelling aid towards diversifying into manufacturing, agriculture, and services can create more jobs and spread economic opportunities.

Governance and corruption: Inefficient governance, corruption, and political instability can hinder development efforts. In 2022, Nigeria scored 24/100 in the corruption perception index (CPI), ranking among the bottom 30 (Transparency International, 2022). Corruption in governance is as old as mankind and can take as many forms as possible. Over the decades, economies have taken measures and are still taking measures to curb corruption, and organisations like Transparency International have helped present CPI data. In Nigeria, corruption has existed for a long time, and it is almost becoming the norm. However, the effect of this practice has had continuous adverse effects on the economy; that is, the grease-the-wheel practice has been a major contributor to stunted economic growth (Rotimi et al., 2022).?

Frequently, the term “corruption” is only viewed from the lens of the government; however, individuals, businesses, managers, contractors and a host of inexhaustible lists are part of this practice. Dayo Olopade, in her book, “The Bright Continent”, categorises this in the term “Kanju.” The author opined that this term represented the corrupt actions of people with ‘hunger’ and 'hustle' as a form of justification. Strengthening institutions, promoting transparency, and fighting corruption are crucial for ensuring aid reaches its intended beneficiaries.

Beyond establishing anti-corruption agencies that have sometimes been found guilty of corruption or enacting anti-corruption policies that have not been implemented, monitoring and evaluating the various strategies needs to be taken seriously. As Hunja (2015) puts it, “learn by doing”; that is, keep iterating the process until an effective and efficient strategy is identified. Emphasis on efficiency. Corruption harms the poor more than the wealthy (UNODC, 2011); therefore, for a country dominated by the poor, it is safe to deduce that the country is in serious harm.

Data: Data is powerful, and it helps present facts that can be used to make informed decisions. One key challenge with the poverty rate in Nigeria is the absence of a reliable and credible database. In a number of cases, there is no data to make informed decisions. Policies and projects are carried out based on sentiment or unreliable data. A practical case is that of the Universal Basic Education (UBEC) in 2022, disagreeing with the 20 million out-of-school figures published by UNESCO (Oyeniran, 2022). If the country had a proper database, this disagreement would not have occurred. In 2021, The World Bank called for nations to strengthen their data system in order to transform the lives of the poor. Technology, aids, and policies cannot work if they are not utilised based on the informed discovery data systems provided.?

Utilising data to inform policies and track progress can be a magic wand to reduce the poverty rate in Nigeria. This allows for targeted interventions and evaluation of their effectiveness. Sufficient data can help enhance and implement only evidence-based policies. The way forward is to restructure the agencies charged with the responsibility of collecting data in the nation to ensure that the methodology involved in the data collection process is credible, reliable and valid.

Education and skills development: A nation is a product of its educational strength, and education acts as an equaliser in any given economy (Alade, 2024). With over 20 million out-of-school children, how will the 70% child poverty rate be reduced? Africa generally has the largest youngest population; therefore, the most populous black nation would logically have its population dominated by young people (This Day Live, 2023) who need education and skill development to thrive and contribute to the future economic development of Nigeria.

According to the World Bank Group (2019), the proportion of individuals between the ages of 15 and 35 who lack formal education, employment, or training was approximately 38% in the year 2018, equivalent to approximately 70.7 million individuals. According to Onu et al. (2021), individuals who have received education and training often find that the skills they acquire are not aligned with the demands of the labour market. This can be attributed to factors such as curricula that are not responsive to market demands, limited availability of relevant training resources and equipment, and other related challenges. Consequently, this contributes to a higher proportion of young individuals who are not engaged in any form of training, education, or employment.

Investing in education and skills training equips individuals with the necessary tools to secure better-paying jobs and participate meaningfully in the economy. Investment in technical and vocational training, talent education and other informal forms of education is an avenue to create educational equality and inclusivity, which leads to shared prosperity. Having a large young population portrays the strength, resilience and creativity that needs to be tapped to create shared prosperity and reduce poverty.

It is also ideal to suggest that more focus should be paid to the northern regions because they account for the highest percentage of the poverty rate in Nigeria. All forms of education should be given priority to all genders, especially girls and all regions, especially the northern region. And these investments should be targeted towards the poor in the society.

Conclusion

It's important to remember that poverty reduction is a complex and long-term process, and there is no single solution that applies universally. However, by addressing the underlying issues, shifting focus, and adopting a multifaceted approach that prioritises local ownership and long-term solutions, Nigeria and Africa at large can move towards a more sustainable and equitable future for all its citizens. The suggestions provided are both sustainable and long-term. Each suggestion can be looked through more holistically to develop structures on how they can be implemented to already existing solutions.

References

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