Poverty is generally measured from a monetary stance. It is defined as the state of living under USD 1.25 a day. It is a prevalent problem in Nigeria as it is estimated that about 110 million out of the 182 million Nigerians are living under the poverty line.
Poverty Trajectory in Nigeria, 1981-2010
Source: Calculations by author based on data from UN, Department of Economic and Social Affairs; and CIA World Factbook
Figure I shows that the proportion of the country’s population living in poverty has increased over the years; from 47.2% in 1981 to 70% in 2010. Accordingly, for every 10 Nigerians, 7 were adjudged poor in 2010. In the cohort of 39 African countries where data exists, Nigeria ranks 36th in proportion of population living in poverty. In comparison to our East and West African counterparts, Rwanda ranks 13th at 39.1% while Ghana ranks 4th at 24.2%.
The most successful occurrence on poverty ever recorded is the ‘Asian Miracle’ – the largest decline in poverty ever witnessed in human history which occurred in China. The country achieved the Millennium Development Goals 15 years ahead of schedule! The number of citizens China has raised from poverty accounts for 70% of the world’s total. Poverty rate fell from 84% in 1981 to 12% in 2010.
In China leading the world to achieve the Millennium Development Goals, some relevant reforms are noteworthy:
Sustained Economic Growth – According to the National Bureau of Statistics of China, between 2001 to 2015, the annual growth rate of the Chinese GDP was stable at an average of 9.7%. Driven by industrialization and urbanization, there has been an increase in employment with labour movement towards the secondary and tertiary sectors of the economy accompanied by increase in wages and salaries.
Infrastructural Development – China’s poverty reduction and elimination strategy is development-oriented and as such, since 2012, substantial infrastructural development has been accelerated in disadvantaged areas. Sectors inclusive but not exhaustive of education, health, electricity, communication, water conservancy and transportation sectors have been advanced.
Poverty Alleviation Programs – The Chinese established large-scale, structured and targeted programs with the sole aim of lifting citizens out of poverty. Some programs include the Seven-Year Program for Lifting 80 Million People Out of Poverty (1994-2000), the Outline for Development-Oriented Poverty Alleviation for China’s Rural Areas (2001-2010) and the Outline for Development-Oriented Poverty Alleviation for China’s Rural Areas (2011-2020).
Social Development Programs – Programs geared towards the poor such as compulsory education; the New Rural Cooperative Medical System (NRCMS), which covers over 97 percent of rural residents; social pension system for rural residents; minimum living allowance scheme were put in place to improve the quality of life of the poor. Preferential policies like the unemployment insurance scheme which provides unemployment relief and medical subsidies for the unemployed and; tax reduction and exemption for SMEs who absorbed labour were made.
The effect of poverty is evident in lack of specialization in occupation; inability to afford basic amenities; and diminished happiness and wellbeing which reduce productivity and further continues the vicious cycle of poverty. To reduce the high level of poverty in Nigeria, like China, poverty reduction would have to become a vital component of our national strategy.