Nigeria: Deferment Of Renewed Hope?

By Kelechi Deca

In 2022, Nigeria had its first comprehensive Multidimensional Poverty Index, MPI, report, measuring households’ monetary poverty, education and basic infrastructure services deprivation. It incorporated a Child MPI, adding a child development and survival dimension. 

The MPI estimates that 133 million Nigerians, or 63 per cent of the population, are multidimensionally poor, with significant disparities in poverty levels across states. Rural areas have higher poverty rates at 72per cent compared to urban areas (42 per cent).

The National Bureau of Statistics, NBS, recently conducted a nationwide survey to better understand Nigeria’s rising poverty trajectory. The NBS survey, “Nigeria General Household Survey – Panel (GHS-Panel) Wave 5 (2023/2024)”, highlights the country’s multidimensional poverty and the impact of rising prices on Nigerians’ purchasing power. 

The survey findings show that two-thirds of Nigerian households are struggling to provide healthy and nutritious meals due to financial constraints. Two out of three households have been unable to afford healthy, nutritious, or preferred foods in the past 30 days due to lack of money. Similarly, 63.8 per cent of households lacked food due to financial constraints, 62.4 per cent were concerned about insufficient food, and 60.5 per cent ate less than they should have. What is more, households experience 6.7 power blackouts every week, reflecting the country’s rising energy poverty. 

To put this into context and understand the trends of escalating poverty, between Waves 4 and 5, or from 2022 to 2024, the proportion of households that reported being worried about not having enough food to eat due to a lack of money increased significantly, from 36.9 percent to 62.4 percent. 

The above findings are in tandem with those of the World Bank. The Brettonwoods institution estimates that Nigeria’s poverty rate would be 40.7 per cent by the end of 2024, thanks to inflation and poor economic management. Other factors contributing to Nigeria’s poverty include inadequate reforms, stagnant per capita income, food insecurity, macroeconomic weakness, social conflicts, and climate change. 

The worrisome trend here in this renewed hope era is that for a family, having food on the table, regardless of quality or quantity, becomes utmost imperative. Other necessities, such as health, education, and shelter, become secondary, and with a dwindling income, may never get any attention. Against this backdrop, one is forced to take a cursory look at existing policy frameworks vis-à-vis challenges to hazard a guess on whether there are indeed grounds for renewed hope.

 

The NBS a few days ago gleefully reported that Nigeria’s GDP grew by 3.46 per cent (year-on-year) in real terms in the third quarter of 2024, highlighting that the growth rate is greater than the 2.54 per cent recorded in the third quarter of 2023 and higher than the 3.19 per cent growth rate in Q2 of 2024. The way the news was received in some quarters suggests the government has been yearning for positive news to support its economic reforms. But is there cause to celebrate? 

In October 2024, inflation jumped for the second consecutive month, reaching a four-month high of 33.9 per cent from 32.7 per cent in September. Escalating food prices, soaring energy costs, and persistent volatility in foreign exchange markets all contributed to the increase. It is also worth noting that since May 2024, when inflation reached 33.95 per cent, a 28-year high, it has continued to rise in a conservative 23-month streak since January 2023. 

The effects of consecutively rising high inflation are better imagined and, interestingly, well captured by the Multidimensional Poverty Index 2024. Unfortunately, there is no hint that a reprieve is imminent. Take the proposed 2025 budget, for example. The budget, the highest in naira terms, is low in per capita measure, presenting little hope for the teeming impoverished Nigerians. 

Nigeria’s current economic situation, with a 28-year high inflation rate and a 20-year low income per capita, combined with a shrinking budgetary allocation, is a recipe for underdevelopment and increased poverty.

With a total debt of N121 trillion, a 25 per cent increase from 2023, the country’s debt-to-GDP ratio has risen to 50.7 per cent, and with a high debt service and low revenue, plans to embark on programmes to alleviate poverty and improve people’s lives are unlikely to receive the much-needed attention. The scenario paints a clear picture of deferring the renewed hope that many Nigerians had expected.

*Deca, a journalist and public affairs commentator, wrote from Lagos