By Adisa Adeleye
In the last three weeks, the nation has been treated to dismal figures of poverty in many parts of Nigeria, especially in the Northern state by the National Bureau of Statistics (NBS).  The figures show that about 70% of the Nigerian population live below the poverty line with income of less than $1 per day.

The figures, though frightening, are not new to many analysts who have expressed serious concern about the deepening poverty of the people in the midst of abundant resources bestowed on the countries by father NATURE.

In 2004, I noted in my book ‘THE AGENDA‘ the ugly problem of POVERTY.  I observed that “Nigeria with a population of about 120 million is regarded as one of the world‘s poorest country inspite of the fact that the country is oil and gas rich.

I explained further that “Nigeria‘s land is fertile but it cannot feed itself properly that the import bill for the year 2001 was N146,812.3 million as against the sum of N103,490 million in 1999.  Many believe that Nigeria should by now be an exporter of food and life animals rather than an importer‘.  That was my view about a decade ago.

Many commentators have given reasons for the present apparent poverty of majority of Nigerians; and others have linked the instances of violence and riots in many northern states to the incidence of poverty.

The Governor of the Central Bank once linked the violence in some northern states to general poverty of the people, and also the imbalance in resource allocation in Nigeria.  For instance, a state like Bayelsa (South South) with small population gets more than five times of federal revenue allocated to it than many states with larger population in the north.  The same argument was canvassed recently by the Niger State Governor, Dr. Babangida Aliyu.

The reference to Bayelsa State is rather unfortunate because that state is endowed with the black gold (oil) on which the economy of the country at present depends.  It has no arable lands for sustainable farming and most of its infrastructure have been devastated by oil mining activities.  And for the survival of the people, Bayelsa and other oil producing states are getting what they deserve.  A more reasonable argument would be that the governments of these states should use their allocated resources wisely and prudently for the benefit of the people.

While the figures from the National Bureau of Statistics (NBS) have tended to portray the incidences of poverty between the northern and the southern states, the inferences have been unhelpful in tackling the problems of poverty in Nigeria.

Most of the states captured in the report, either in the north western or the south western zones are not inhabited by only indigenes of those areas, it is a common knowledge that each state whether in the north or south harbors a significant number of very rich people and a large number of the poor – which gives Nigeria the embarrassing tag of a ‘divided country of the rich and the poor‘.

Many analysts have attributed the crisis of poverty in the country to the economy which has been described as ‘dysfunctional‘ (whatever that means).  It is an economy with comparatively high growth rate of Gross Domestic Product (GDP), but with higher growth rate of unemployment and inflation.  This means that the increasing wealth of the nation does not touch the lives of majority of the people.  There is something wrong with the structure of the Nigerian economy.  The theoretical assumption is that increase in the growth rate of the GDP should translate into increase in employment and improved standard of living of the people.  To me, the economy of this country looks clumsy and devoid of any theoretical explanation.

Imagine for example, a country which produces crude oil and gas in abundance and yet imports refined oil from buyers of its crude oil (and maintains a subsidy of about N1.7 trillion for domestic consumption in 2011).  Also, Nigeria as a copious producer of tomatoes and yet the world‘s biggest importer of tomato paste to the tune of $1 billion (according to the Central Bank Governor).

There are also many items on the import list which could be conveniently produced at home and exported to earn foreign exchange.  Such is the crazy atmosphere in which the Nigerian economy is exposed that in a case of serious unemployment and poverty, tightening monetary policy (restrictions of loanable funds) is the preferred official policy.  It is laughable that an import dependent country would prefer a lower value for its national currency.

Majority of Nigerians are thereby condemned to consume used cars and second hand clothing and other essential materials.

It is the view of many oil economists that Nigeria is not getting full benefits from its oil resources.  For instance, POWER which is the engine of industrial growth is inadequate because of inability to utilize abundant gas and diesel oil as an alternative source to electricity in industries.  Though many companies are on gas supply for their operations, the practice is not widespread enough to stimulate industrial expansion in many areas.

It would have been possible for the government to provide pipelines to transmit gas to various industrial areas all over the country as a means of efforts to industrialize the whole parts of the country.  The act of digging the ground and laying of pipelines in them would provide avenues of employment and would even be preferable to Keynes suggestion of digging and covering grounds as a means of providing employment.

On the question of refined oil imports, it is a surprise that a sum of N800 billion has been allocated in this years‘ budget for SUBSIDY when it is assumed that the downstream sector of the oil industry is being deregulated.

It is agreed that subsidy on the consumption of oil import is an economic waste.  Instead of importing a single product (petrol or kerosene), it would have be wiser to distribute the unrefined portion of 450,000 barrels per day to marketers, for refining at neighboring refineries e.g. Ivory Coast, and thereby enjoy the full complement of products derived from a barrel of crude oil.

In the fight against poverty and inflation, the economy should be propelled to expand and grow.  Emphasis should be placed on strengthening domestic manufacturing industry and agriculture. The weapon against inflation is widening the sources of supply of commodities at home, and at affordable prices.

The government on its part has no alternative but to increase national income (through injection of funds into the economy) inorder to stimulate effective demand.   Thus, investment would increase and this would lead to higher capacity utilization in idle plants and increase employment.