Reports that the World Bank has raised the poverty line to $2.15 (N936.32) from $1.90 (N827.45), effective September 2022 should, everything being equal, be a cause to cheer, especially by the poor and vulnerable across the word, particularly Nigeria, where hyperinflation has eroded the purchasing power of the citizenry and worsened the poverty situation.
The new poverty benchmark by the World Bank implies 0.25 cents higher and N108.87 more at N435/$ exchange rate as of last Monday. It means households need above N936 daily to be above poverty level. The bank, in a report, also said the national poverty lines in lower-middle income countries ($3.20 per day) and upper-middle income countries ($5.50) had been adjusted to $3.65 and $6.85. The bank introduced the dollar-a-day poverty line in its 1990 World Development Report which was based on the 1985 Purchasing Power Parities (PPP).
It said that over time the poverty line rose due to increases in prices. As new PPPs have been released, the bank has revised the international poverty line from $1 a day in the 1985 PPPs to $1.08 with the 1993 PPPs, to $1.25 with the 2005 PPPs, and to the $1.90 line with the 2011 PPPs that has been in use till today. The bank announced in May, 2022, that in the fall of this year it would switch to the use of the 2017 PPPs for the determination of global poverty figures.
“As a result, the international poverty line will be $2.15. This means that everyone living on less than this amount per day will be considered in extreme poverty,” the bank explained.
In Nigeria, the national poverty line is N137,430 per person per year, which gives a national daily poverty line of N376.5 for each Nigerian. The exchange rate of N425.55/$, on Monday, September 5, 2022, came to about $1.13 per day per person in Nigeria.
The World Bank last year declared that in 2020 alone, as many as seven million Nigerians might have been pushed into poverty by rising prices. The bank explained that the number excluded the direct impact of COVID-19 on welfare.
Commenting, an Assistant Professor in International Relations, Politics and International Studies, University of Warwick, UK, Dr Akinyemi Oyawale, said what these further showed us was the need for responsibility and national introspection rather than denial or acceptance of the claims.
He said, “Rather than feel sorry for ourselves, we must look at ourselves more thoroughly and the Nigerian government needs to both diagnose our problems, including the ones highlighted and beyond, and then use the intellectual and material resources at its disposal to make the lives of its citizens better by standards that are not necessarily defined by global institutions.”
The President Muhammadu Buhari administration had set a target to lift 100 million Nigerians out of poverty over a 10-year period. However, the World Bank noted that in 2018/19, before COVID-19, some 40.1 per cent of Nigerians were living in poverty, about 82.9 million people, and that poverty reduction had stagnated since 2015.
Although critics have described President Buhari’s plan to lift 100 million Nigerians out of poverty as a daunting task, the president has continued to reiterate his commitment to achieve the target. “We remain confident that our goal of lifting 100 million Nigerians out of poverty in 10 years is achievable,” he assured.
In any case, amid a high inflation rate and rising unemployment figure not helped by a devalued naira, the target is expected to be a tall order. The National Bureau of Statistics (NBS) put Nigeria’s poverty figure at over 82.9 million Nigerians, or 40 per cent of the country’s population. The unemployment rate also spiked to 33.3 per cent in the fourth quarter of 2020, the highest in over 13 years.
When these gloomy figures are placed side-by-side with the estimated 27.4 million Nigerians earning less than N100,000 yearly, according to the Socio-Economic Rights and Accountability Project (SERAP), it shows the government clearly has its work well cut out for it.
President Buhari said he was committed to flipping this page, and he downplayed the allegations that his talks are often dogged by inertia. He noted that he has approved the expansion of the beneficiaries of the administration’s social investment programme, N-Power, from 500,000 to 1,000,000.
“To grant increased access to credit to the most poor and vulnerable, I have directed an increase in the disbursement of Government Enterprise and Empowerment Programme loans to an additional one million beneficiaries laying more emphasis on the smallholding farmers through the farmers Moni program,” he said.
On the backdrop of the recent increase of the poverty line by the World Bank, we urge the Buhari government to raise the bar on its poverty alleviation programmes.
The Nigerian government should also, as a matter of utmost national importance, introduce policies and programmes that will enhance the living standard of the people, which presently is abysmally low. For instance, government should buoy up the naira, and ensure local refining of petroleum products in order to improve the living standard of Nigerians.