124.2m Nigerians Living in Poverty

• 124.2m Nigerians Living in Poverty

Rising poverty amid high unemployment rate and weak new job creation continues to dictate economic prospect of Africa’s largest economy, Nigeria.

In a recent report by the African Development Bank (AfDB),  more than half of the nation’s 36 states have poverty rate above the country’s average of 69 percent. Suggesting that out of 180 million reported population size, 124.2 million people are living in poverty.

According to the report, “Poverty remains widespread. The poverty rate in over half of Nigeria’s 36 states is above the national average of 69 per cent.

“High poverty reflects rising unemployment, estimated at 23.1 per cent in 2018, up from 14.2 per cent in 2016. Low skills limit opportunities for employment in the formal economy.

“Government social programmes – N-Power and other youth empowerment schemes – are meant to address unemployment.”

The report attributed the situation to weak economic growth and rising debt obligations. In 2019, Nigeria spent 50 percent of federal collected revenue on debt servicing and still pushing for approval to borrow $29 billion.

The report said, “Real Gross Domestic Product growth was estimated at 2.3 per cent in 2019, marginally higher than 1.9 per cent in 2018.

“Growth was mainly in transport, an improved oil sector and Information and Communications Technology. Agriculture was hurt by sporadic flooding and by conflicts between herdsmen and local farmers.

“Manufacturing continues to suffer from a lack of financing. Final household consumption was the key driver of growth in 2019, reinforcing its 1.1 per cent contribution to real GDP growth in 2018.

“The effort to lower inflation to the six to nine per cent range faced structural and macroeconomic constraints, including rising food prices and arrears payments, resulting in a rate estimated at 11.3 per cent for 2019.

“With fiscal revenues below seven per cent of the GDP, increased public spending widened the deficit, financed mainly by borrowing.

“At the end of June 2019, total public debt was $83.9bn, 14.6 per cent higher than the year before. That debt represented 20.1 per cent of the GDP, up from 17.5 per cent in 2018.

“Domestic public debt amounted to $56.7bn, external public debt, $27.2bn. The share of bilateral debt in total debt was estimated at 12.1 per cent and that of Eurobonds at 40.8 per cent.

“High debt service payments, estimated at more than half of federally-collected revenues, created fiscal risks. The current account surplus sharply declined due to increased imports, lower oil revenues and a smaller-than-expected improvement in capital flows.”