Nigeria slow in poverty reduction – World Bank

Nigeria is slow in the process of reducing poverty and faces the challenge of leveraging oil resources to promote sustained inclusive growth and reduce poverty, inequality and unemployment.

The World Bank made these assertions in its Nigeria Country Partnership Strategy 2014-2017, which was released in Abuja on Monday.

The bank also confirmed its position, which had been reported by The PUNCH in November 2013 that100 million Nigerians live in extreme poverty.

At the event attended by Governor Adams Oshiomhole of Edo State and his Kogi State counterpart, Capt. Idris Wada, Oshmohole said Edo State had lost N15bn of projected oil revenue in the last two years due to the high incidence of oil theft in the country.

The Chairman, House of Representatives Committee on Loans, Aids and Debt Management, Mr. Adeyinka Ajayi, quoting contractor sources, alleged that the economy had lost about 500,000 jobs in the last four years as a result of huge debts to contractors running into trillions of naira.

The World Bank said although the percentage of Nigerians living in extreme poverty had slightly reduced, the number of people in poverty had been increasing due to high rate of population growth.

The bank said, “So far, with rapid population, Nigeria has made slow progress in reducing poverty. With a medium age of 14 and population growth at close to three per cent, Nigeria faces the challenge of providing jobs for its teeming youth population.

“Despite the robust growth over the last decade, rapid population growth combined with increasing inequality hampered faster poverty reduction. The poverty (consumption per capita) declined from 48 per cent in 2004 to 46 per cent in 2010, using the adult equivalent methodology.

“The percentage of Nigerians living in extreme poverty ($1.25 per capita per day, purchasing power parity adjusted) declined from 64 to 63 per cent. Given population growth, this implies that the number of extreme poor increased from 86 million to 100 million in 2010.”

The bank added, “The key challenge facing Nigeria is, therefore, how to leverage its oil resources to promote sustained inclusive growth, reduce poverty, inequality and unemployment. Nigeria is highly dependent on oil, which makes the country vulnerable to commodity price volatility.

“Nigeria needs to diversify its economy to achieve sustainable inclusive growth and accelerate the creation of jobs. Nigeria has been growing at six and eight per cent annually over the past decade but will need to achieve even higher growth rates to make a dent on poverty.

“This will require effective macroeconomic management, socio-political stability, the provision of key infrastructure, structural reforms to reduce impediments to diversified growth, and more effective efforts to achieve social inclusion.”

The World Bank also said that lower oil production had presented the nation with increasing macroeconomic challenges, adding that Nigeria’s oil output had contracted in the last three years, with negative growth between 2012 and 2013.

“Regulatory constraints, other uncertainties and security risks have limited investment in oil and natural gas. Investors have been hesitant to make new investments in the light of uncertainty regarding legal, regulatory and fiscal terms in the Petroleum Industry Bill currently being examined by the National Assembly,” the bank said.