By Olu Fasan

THE World Bank warned this week that Nigeria was heading for an explosive poverty crisis without urgent reforms. Launching its Nigeria Economic Update on Monday, the Bank said the number of extremely poor Nigerians could rise by 30 million by 2030. Of course, with nearly 100 million of its citizens living in extreme poverty, Nigeria has already acquired the sobriquet “poverty capital of the world”, snatching the shameful title from India. But now the World Bank has warned that this country could account for 25 per cent of the world’s extremely poor population by 2030 if it fails to act urgently.

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This is depressing because poverty is actually falling globally. An analysis by World Data Lab, a think-tank, shows that one person escapes extreme poverty every second. What’s more, prosperity is also rising globally, with five people entering the middle classes every second. Indeed, the reason Nigeria has overtaken India as the poverty capital of the world is not only because extreme poverty is rising in this country, but also because it has fallen sharply in India.

The World Data Lab says that nine in ten of the new entrants into middle classes globally come from Asia, including India. By contrast, the middle class is not only shrinking in Nigeria, extreme poverty is also deepening, “growing by six people every minute”, according to the Brookings Institution, which supports the World Bank’s dire prognostication.

All of this is annoying. Yes, because it’s the avoidable cost of inaction. Nigeria’s leaders are, like Nero, fiddling while Rome burns. President Muhammadu Buhari talked glibly about “lifting 100 million Nigerians out of poverty in 10 years”, but the World Bank says that his government’s policy reform inertia could actually cause the number of Nigerians living in extreme poverty to increase by 30 million by the end of that ten years. Nations do not tackle poverty by just talking about it and doing nothing. China reduced the proportion of its people living in extreme poverty from 60 per cent in 1990 to 12 per cent in 2010 with radical reforms.

The late American economist Mancur Olson famously proposed the crisis hypothesis of policy reform. He argued that major crises would jolt a society out of its sclerosis and open the door to policy reform. Take the climate change crisis.

Most major countries have now declared a climate emergency and adopted the policy of net-zero carbon emission. Major crises, whether at global or national level, call for major reforms. But what major policy reform has emerged from the ashes of a major crisis in this country? The answer is none! Nigeria is crisis-ridden and long due for root-and-branch economic, political and institutional reforms. But its natural tendency to be sclerotic is beyond belief.

Yet, if nothing shakes Nigeria from its unresponsiveness, the poverty ticking time bomb must. Nigeria’s population is growing at about three per cent, while its economy is stagnated at just above two per cent growth rate. Economic growth is the key antidote to poverty; growth is the rising tide that lifts all boats. Truth is, Nigeria’s economy needs to be growing at a much faster rate than its population! But that seems a mirage with the government’s current anti-growth policies.

But, let’s face it, even economic growth won’t necessarily translate into poverty reduction in Nigeria. After all, when the economy was growing at about seven per cent before the oil-price crisis of 2015, it was more or less a jobless growth, with hardly any impact on poverty reduction. The World Bank described this as “the poverty/growth puzzle” in its 2014 Nigeria Economic Report. Of course, the growth was jobless because it was driven by the oil sector, which doesn’t create much jobs.

Thus, it follows that if economic growth is to create jobs and reduce poverty in Nigeria, it must come from the productive sectors of the economy. But with Nigeria lacking a robust private sector, with productive and export capacities, it can’t tackle the bourgeoning unemployment, which is the greatest cause of poverty.

Well, equally, you can’t talk about poverty in Nigeria without mentioning its large informal sector. Truth is, the informal economy doesn’t generally enable people to escape poverty. Yet, Nigeria’s informal sector, at 65 per cent, is the largest in sub-Saharan Africa. Then, there is the problem of low-productivity, low-wage jobs, which condemn many of those lucky enough to be employed to what’s known as “in-work poverty”. And what about the high cost of living, another driver of poverty? I have written previously in this column about how the protectionist policies of the Buhari government, such import bans and the border closures, increase the costs of living. Trade has helped to drive poverty reduction globally, and it’s shocking that Nigeria can ban imports while poverty ravages its people.

So, all the causes of poverty are present in Nigeria. But the solutions are not far-fetched. Across the world, a vast array of tools has been developed to tackle poverty. These include: boosting employment, through private-sector-led growth and foreign direct investment; increasing incomes through a reasonable national living wage; reducing the cost of living, particularly the prices of food; helping people to move from informal into formal work; providing appropriate, affordable and targeted welfare support to the most vulnerable; enabling people to escape poverty though better education and training; and promoting an entrepreneurial society by incentivising self-employment.

But, as the UK-based John Rowntree Foundation said in its report, which reviewed evidence of poverty reduction in many countries, poverty reduction also requires a coherent strategy and political commitment. Sadly, the Buhari government’s anti-poverty policy lacks such a coherent approach. It’s merely palliative, failing to reduce extreme poverty. But palliative measures are enough. Nigeria faces a poverty time bomb; only radical reforms can avert it!