Nigeria, the largest economy in Africa has extremely high levels of economic inequality. The nation’s economy is growing, it has a large human capital base, and it has the capacity to economically lift millions out of poverty.
Nigeria’s extreme poverty rate was estimated to be 88.4 million people in 2022. About 40% of Nigerians live in absolute poverty, which is defined as having an income of less than $1.90 per day, with no social safety net.
The country holds 37 billion barrels of proven oil reserves as of 2016, ranking 10th in the world and accounting for about 2.2% of the world’s total oil reserves. But by the end of this year, more than 5 million more people in Nigeria will slide into poverty, according to World Bank’s report.
Nigeria has about 20 million school-age children who are not attending school. Widespread and extreme poverty are facts of life in Nigeria. It is a reality that shows a lack of fundamental necessities including food, clothing, and education. People who live in extreme poverty frequently go without even the most basic requirements, leaving one to wonder how they manage to exist.
Nigeria’s poverty and inequality are not brought on by a lack of resources; rather, these resources are misused, misallocated, and misappropriated.
At the core of the issue is a political elite disconnected from the daily challenges of ordinary Nigerians and a culture of corruption. Instability, banditry, terrorist assaults, subpar infrastructure, and climate change have all made supply shortages worse. A further example is the migration of farmers to metropolitan areas in pursuit of elusive prospects.
The World Bank claims that the rise in food prices is one factor contributing to the poverty that many Nigerians are now experiencing. The more than 55% share of food costs in Nigeria’s 20% inflation rate is significant. In Nigeria, the average family spends more than half of its income on food.
Many Nigerians also lack access to basic amenities like electricity, clean water, and adequate sanitation, particularly in the north of the country. 90 million of the 210 million citizens in the nation do not have access to power. Nigeria has about 20 million school-age children who are not attending.
Rising food costs make poverty worse by lowering households’ real purchasing power and diverting money from necessities like housing, health care, and education.
Second, the country’s food supply may not be keeping up with demand due to Nigeria’s rapid population increase. The population of Nigeria has increased more quickly than its agricultural output. In other words, agricultural productivity is only just keeping up with consumption.
According to Tara Vishwanath, co-author of the report and lead economist for the World Bank, “Conflict is spreading and intensifying across Nigeria, so it is important to implement programs to support poor and vulnerable Nigerians that are simple and flexible while also limiting the risk of exacerbating fragility and conflict.”
Poverty in Nigeria has a number of consequences and shortcomings. Poor healthcare is one of the main consequences of poverty, as seen by Nigeria’s high infant mortality and low life expectancy. Due to a lack of basic resources, Nigeria’s poor confront a number of health problems.
Less than 20% of Nigerian employees hold the wage employment most effective in lifting people out of poverty, despite the fact that most workers are engaged in small-scale domestic farms and non-farm companies.
Taking action
Nigeria is not a poor nation by default, but millions of people go hungry every day. To provide food and relief to those in need right away, the government must collaborate with the international community. However, it cannot end there.
Millions must be lifted out of poverty by creating a realistic and sustainable political and economic system that benefits everyone, not just a select few, by combating corruption, especially in the public sector, eliminating the petroleum subsidy fast becoming a black hole in Nigeria’s budget, and reduce high levels of insecurity.
More industrial production, additional funding in education, domestic and foreign investment, not just financial stipends to the poor often used for political gains, are what many Nigerians need.
Fiscal Policy Institute has the needed solution