Nigeria’s growing economy and rising poverty

Culled from Daily Independent

Monday, April 8th, 2014

By Chukwudi Nweje

Assistant Features Editor

IF the figures being reeled out by the National Bureau of Statistics (NBS) are indeed factual, then one could argue that the Federal Government is on course to realising the aims and objectives of the Financial System Strategy (FSS) 20:2020. Initiated in 2006 by the Central Bank of Nigeria (CBN) in collaboration with all other Nigerian financial services regulators, the FSS 20:2020 is a visionary and an ambitious developmental programme designed to create an international financial hub in Nigeria as well as evolve a financial infrastructure to finance the country’s quest to join the top 20 economies in the world by the year 2020. It also aims to “drive rapid and sustainable economic growth” as envisioned by Vision 2020.

The NBS report released on Sunday by Minister of Finance and Coordinating minister of the Economy, Ngozi Okonjo-Iweala, at an interactive session showed that Nigeria’s GDP grew by $149.3 billion or 41.4 per cent (N26.018 trillion or 48 per cent) between 2010 and 2013. In the three-year period, the size of Nigeria’s economy stood at N54.204 trillion (about $360.6 billion) in 2010; rising to N63.258 trillion ($408.8 billion) the following year; and N71.186 trillion ($449.9 billion) in 2012. According to the NBS report, the changes between the old and new rates “represent growth of 59.5 per cent in 2010; 69.13 per cent in 2011; 75.58 per cent in 2012; and 89.22 per cent in 2013 (forecast)”.

Incidentally, it also showed that with the economy, at $509.9 billion (N80.222 trillion) at the end of 2013, Nigeria has become Africa’s biggest, pushing South Africa with $370.3 billion to the second position.  The Minister of Finance further disclosed that the rebasing also showed that Nigeria’s economy is now far more diversified than previously thought, with new, previously un-captured, sub-sectors. She listed major growth drivers as agriculture, which alone contributed 24 per cent, as against 30 per cent in the 1990 data, while the services industry (comprising telecommunications, Information Technology, airlines) emerged the biggest with 50 per cent contribution. The exercise also revealed that Nigeria’s GDP makes it the 26th largest economy in the world. With the latest ratings, Nigeria only needs to move up six places again to realise its FSS 20:2020 target.

Nevertheless, the figures have generated some debate among analysts. Some of them have described the data reeled out by the NBS and the ministry of Finance as deceptive and a government propaganda. They argue that an economy like Nigeria’s which is import dependent and which has a very high rate of unemployment cannot be bigger than that of South Africa that is export driven with sound infrastructures.

For instance, Finance and economic analyst, and Managing Director of Lagos-based Financial Derivative Company Limited, Bismarck Rewane, in a chat with BBC described the revisions as “a vanity”. He argued that the figures mean nothing to the average Nigerian. According to him, the new figures will not make Nigerians “better off tomorrow. It doesn’t put more money in the bank, more food in their stomach. It changes nothing”.

Debo Adeniran, Executive Chairman of Coalition Against Corrupt Leaders (CACOL) agrees.  “There is virtually nothing to be happy about. What is the essence of Nigeria becoming the Africa’s biggest economy when it doesn’t translate to improved standard of living for the common man? What is the essence of the new GDP figure when it doesn’t translate to reduction of employment in the country?” he queried. He added that Nigeria was also rated as one of the poorest countries in the world by the World Bank, alongside countries that are either overpopulated or ravaged by war like Bangladesh, China whereas the country does not suffer such fate.

According to him; “These are parallel things. If Nigeria is the Africa’s biggest economy, what are the indices that the judgment was based on?  An average Nigerian citizen does not have access to the basic things of life like potable water, decent accommodation, good health care delivery among other things; life expectancy is below 50years; infant mortality rate is 78 per 1000 live births; under-five mortality rate is 124 per 1000 live births and Nigeria is the 7th highest infant mortality rate in the world. Nigeria boasts of the richest man in Africa and we also parade the poorest people in the world. One out of 7 poorest people in the world is a Nigerian.

“Basically, the new GDP does not translate to good living condition for the mass of Nigerians when about 80% are living below poverty line. As a matter of fact, out of that, more than 60% are actually living below $1 a day which means the country harbours the poorest of the poor. It is the mal-governance that allows the lopsided and the inordinate correlation between the economy growth and the per capita income. The economy of the country has been put in the stronghold of less than 1% of the population.”

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