Nigeria: rich or poor or a bit of both?
Even as the government of Nigeria rejected the World Bank’s ranking on extreme poverty, citing the forthcoming GDP rebasing exercise, it is critical to note that Nigeria’s higher GDP is shared among such a vast population that its net effect on reducing per capita poverty is quite insignificant. (Image: Euro News)
This month has certainly been an eventful one for Nigeria, which found itself wearing a crown of thorns for being in the top 5 countries on extreme poverty, even as it now proudly sports a golden coronet for being the continent’s largest economy.
In the first week of the month, the World Bank listed Nigeria alongside four others as countries with the world’s extreme poverty, as more than 7% of its population was found to be living in extreme poverty, defined as people living on less than $1.25 a day. This was followed by the GDP rebasing exercise, which factored in growth and gains from sectors added since 1990 and pulled up the West African frontier economy to the status of Africa’s largest economy, ousting South Africa from its throne.
However, even as the government of Nigeria rejected the World Bank’s ranking on extreme poverty, citing the forthcoming GDP rebasing exercise, it is critical to note that a higher GDP does not necessarily negate the effects of a huge population trapped in extreme penury.
This can be best explained in terms of the West African economy’s huge population, which means that any ‘notional’ gains from the GDP revision continue to be shared among a population of 174.51 million, Africa’s largest.
On a per-capita (or individual) basis, South Africa’s GDP numbers are three times larger than Nigeria’s. Thus, even with a rebased GDP of $510 billion against $370.3 billion GDP for South Africa, analysts still say that Nigeria’s output is underperforming as its population is more than three times that of South Africa’s (52.98 million). In a nutshell, Nigeria’s higher GDP is shared among such a vast population that its net effect on reducing per capita poverty is quite insignificant.
Meanwhile, World Bank Group President Jim Yong Kim declared that extreme income inequality is a disincentive to efforts at reducing extreme poverty globally, pointing out that 1 billion people in the world live in the throes of poverty.
While this figure represents a drop when compared with an estimated 1.2 billion in 2010, Jim Yong Kim noted that the development had made it next to impossible to meet the twin goals of ending extreme poverty by 2030 and boosting shared prosperity.
In his address at the ongoing Spring meetings of the International Monetary Fund/World Bank Group in Washington DC, US last week, Kim stated that vast numbers of the poorest would have to decrease by 50 million people annually by 2020, if the world were to be on track to meet the target of ending extreme poverty by 2030.
Nigeria is currently listed among the top five countries in terms of number of poor with 7 per cent while India and China occupy second and third slots with 33 per cent and 13 per cent respectively.
Other countries listed along Nigeria include Bangladesh with 6 per cent and Democratic Republic of Congo with 5 per cent.
The ranking may however, qualify the five countries which account for 760 million of the world’s poor, for the $70 billion International Development Association (IDA) over the next 10 years.
Two-thirds of the world’s extreme poor are concentrated in just these five countries, and if another five countries – Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya – are taken into account, the total grows to 80 percent of the extreme poor.