ECONOMISTS have expressed the hope that states can turn around their economic fortunes with increased partnership with the private sector, amid concerns of growing poverty,
A report, ‘Poverty and Equality in Nigeria’, released by the National Bureau of Statistics (NBS) in 2019 had shown that many states were still neck-deep in poverty, struggling to create wealth for their people.
Findings have also shown that some governors have been unable to meet up with the minimum wage payment, and might even struggle further with the transitioning of the Nigerian National Petroleum Limited (NNPC Ltd.) which could stop monthly remittance into the federation account.
Amid these concerns, economic analysts say governors need to explore the economic potentials of their respective states for wealth creation.
“They need to grow their economy beyond reliance on Federation Allocation Account remittances. State governors must run states as business and not just as political empires that cannot satisfy the demands of its citizens,” an economist with the International Labour Organisation (ILO), Celestine Okeke, told THE ICIR.
The NBS report showed Sokoto and Taraba states leading the poverty train, followed by Jigawa, Ebonyi, Zamfara, Yobe and Adamawa states in the poorest states ranking.
The report, which remained the latest so far on the issue from the Statistics office, noted that Sokoto State had a 87.73 per cent poverty headcount rate, followed by Taraba with 87.73 per cent, Jigawa with 87.02 per cent, and Ebonyi with 79.76 per cent.
The report disclosed further that Lagos, Delta, Osun, Ogun, Oyo, Edo and Anambra States had the least in terms of the poverty level.
The report also revealed that more than 82.9 million Nigerians were poor.
Commenting on the report, a professor of Economics, Ken Ife, told THE ICIR that states must enhance partnership with the private sector to drive wealth creation.
Ife said, “The states, respectively, should look at where they have competitive edges. There must be partnerships of states and local authorities with the private sector that will encourage them to invest, for instance, in oil palm plantation, in economic trees.
“You could see that when Dangote needed 50,000 hectares for plantation, Nasarawa State gave them. Governors should enable partnerships that create wealth. They should take proactive steps.”
The NBS report also revealed that 40.1 per cent of the total population in Nigeria was classified as poor, which implied that an average four out of 10 individuals in Nigeria had real per capita expenditures below N137,430.00.
In 2020, the Nigerian economy shrank by 1.8 per cent, its deepest decline since 1983. The Covid-19 crisis drove the economic slowdown; the external context was marked by capital outflows, intensified risk aversion, low oil prices, and shrinking foreign remittances.
Already, Nigeria has a soaring inflation rate of 18.6 per cent, which could surge further, with the Federal government borrowing N19. 9 trillion from the Central Bank of Nigeria (CBN) through its Ways and Means.
A quantum economist, Olumide Adesina, stressed that both the Federal and state governments are in a tough fiscal situation currently as a result of delays to drive reforms in the oil sector and other aspects of the economy.
Olumide said, “Saudi Arabia, for instance, in the second quarter of 2022 has a budget suplus of $21 billion due to higher oil prices and reforms in the sector.On the other hand, Nigeria’s excess crude account is dwindling because of poor accrual, oil theft and subsidy payments causing Nigeria fiscal problems.”
He noted that the Nigerian government’s lack of fiscal discipline had led to the World Bank urging the government to take some measures to put the economy back on track.
Measures the World Bank recommended include doing away with power and electricity subdisidies, and ending multiple exchange rates in foreign exchange management.
On Nigeria’s rising spate of poverty, the World Bank had also projected in March this year that the number of poor Nigerians would hit 95.1 million in 2022.
The global bank revealed this in its poverty assessment report, titled, ‘A Better Future for All Nigerians: 2022 Nigeria Poverty Assessment.’
The report noted that the Covid-19 crisis was driving up Nigeria’s poverty rate, pushing more than five million additional people into poverty by 2022.
With real per capita GDP growth being negative in all sectors in 2020, the World Bank said poverty would deepen, while those households that were just above the poverty line prior to the Covid-19 crisis would likely fall into poverty.
“Were the crisis not to have hit (the counterfactual scenario), the poverty headcount rate would be forecast to remain virtually unchanged, with the number of poor people set to rise from 82.9 million in 2018/19 to 85.2 million in 2020, and 90.0 million in 2022 due largely to natural population growth.
“Given the effects of the crisis, however, the poverty headcount rate is, instead, projected to jump from 40.1 per cent in 2018/19 to 42.0 per cent in 2020 and 42.6 per cent in 2022, implying that the number of poor people was 89 million in 2020 and would be 95.1 million in 2022. Taking the difference between these two scenarios, the crisis alone is projected to have driven an additional 3.8 million Nigerians into poverty in 2020, with an additional 5.1 million living in poverty by 2022.
Some analysts have expressed worry that despite the dwindling revenue resources and Nigeria’s fiscal crisis, many states and even the federal government are yet to imbibe the culture of fiscal discipline and wealth creation.
“Nigeria as a country has crossed the red line when it comes to the management of public resources. In the midst of revenue shortages where government borrows to pay salaries, it is disappointing that there are still ongoing leakages and frauds perpetrated among government offices,” an economist and public affairs analyst with the Centre for Social Justice, Victor Emejuwe, told THE ICIR.
Emejuwe stressed that for the federal and state government to make progress economically, it was time to maintain fiscal discipline in the management of public resources and expand wealth creation mechanism through partnership with the private sector.
“To achieve this, government needs to implement policies that advance wealth creation, while also providing preventive checks against corruption, as well as strengthening the sanction mechanisms in the existing laws.”
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.