As the world marked the International Day for the Eradication of Poverty yesterday, Sulaimon Olanrewaju writes on poverty in Nigeria and the challenges of the poverty alleviation programmes embarked upon by various governments.NIGERIA is a paradox; so wealthy, yet so poor; so endowed, yet so deprived. Nigeria makes more money than many countries of the world but unfortunately is ranked as the world's 20th poorest country apparently because most Nigerians (92 per cent) live below the poverty line as they subsist on less than two dollars (N320) a day. According to the Nigerian Bureau of Statistics (NBS), no fewer than 33 million Nigerians are unemployed, many of them university graduates, while the 2010 Global Monitoring Report of the United Nations Education, Scientific and Cultural Organisation (UNESCO) puts the number of out of school children at over eight million. Infant mortality rate is 85.8 of 1000 live births, under-five mortality rate is 137.9 of live births, malnutrition prevalence is 41 per cent, insecurity rate is alarming, while life expectancy at birth is 48.1 years. So, for most Nigerians, poverty has made life not just boorish but also hellish.Nigeria, despite its head start ahead of many countries at the outset (we beat France to having a television station in 1959), has since been relegated to the backwaters of under-development with poverty in the country steadily on the rise. Shortly after independence in 1960, according to the Nigerian Bureau of Statistics, about 15 per cent of the population was poor. This rose to 28 per cent in 1980. By 1985, it had risen to 46 per cent, dropping to 43 per cent in 1992. However, by 1996 the poverty incidence had gone up to 66 per cent before climbing further to the current rate of 92 per cent. This rise in poverty rate in the country has been inversely proportional to the petro-dollar wealth of the country; it seems Nigeria makes more money to get Nigerians poorer; the richer the country, the poorer the citizens. This is what has led some experts to submit that the country is steadily sliding from relative to absolute poverty. Relative poverty is a measure of income inequality. It is measured as the percentage of population with income less than a fixed proportion of median income. Absolute poverty, however, is 'a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."Causes of povertyTwo international organisations have given apt definitions of poverty. According to the United Nations, poverty, fundamentally, is a denial of choices and opportunities, a violation of human dignity. 'It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to; not having the land on which to grow one's food or a job to earn one's living, not having access to credit.'The World Bank, in its own, describes poverty as pronounced deprivation in well-being in a multi-dimensional manner. 'It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one's life.'The distillation from the two definitions is that poverty starts with exclusion and results in deprivation. The poor are so because they have been excluded from opportunities to earn decent income, enjoy health care facilities, access educational facilities. It is this exclusion that leads to a debilitating lifestyle that underpins poverty.Official corruptionThe exclusion that causes poverty is precipitated by a number of factors. One of these is official corruption.Every year, funds are voted to address certain needs in the country but such money is hardly channelled to the intended projects but is instead diverted to personal use of the state officials in charge of such projects. An example is the issue of electricity. Between 1999 and 2007, $10billion (about N1.6trillion) was voted for electricity power generation improvement but the bulk of the money was not used for what it was voted for. This has two major effects on the populace; the first is that the commonwealth of the people had been converted to personal use of a few. The import of this is that while a handful of the people get stupendously rich, the vast majority is discomfited; the gain of a few becomes the loss of the majority.Whenever the government plans to revisit the issue of fixing electricity, fresh funds have to be sought for it; this is money that could have been put to other use had the first one been properly used.Then, the opportunity cost of the corrupt enrichment of the state officials that failed to use the money judiciously is the pains of the populace as a result of the failure to get facilities for which money was voted.The inability of the state to ensure regular electricity supply has been partly responsible for the growing poverty in the country. The cost of doing business in the country has hit the roof with the effect that many multi-national companies have relocated to other countries. The consequence of this is that a number of Nigerians that would have been employed have lost that opportunity to nationals of other countries. Then, many cottage industries that would have sprouted had electricity supply been regular have remained mere dreams and business plans. Again, this has reduced the number of people that could be employed. It is this non-employment of able-bodied and skilled people that results in exclusion that produces poverty. Most of those who are unemployed are skilled but corruption has excluded them from employment.Commenting on the nexus between corruption and poverty, Professor Marshal Owolabi, a Texas, United States of America-based economist, said the strongest hindrance to poverty reduction in the country was corruption.According to him, 'Take the Sagamu-Benin express road for instance. We all know how many times money has been budgeted for the rehabilitation of that road. For a moment, take your mind away from the money but look at the number of people who have lost their lives on that road. Those are the lucky ones. Those who did not die are the unlucky ones because for many of them and their families, especially those who are their families' bread winners, it is a plunge into poverty. If a self-employed man is involved in an accident and has to spend six months or one year in the hospital, it means for that period, there is no income for him despite the fact that he has to keep spending money. Let's not forget the cause; it is because some people stole money meant for the repair of that road on which the accident occurred.'Pushing the argument further, Owolabi said if those who are supposed to ensure compliance with standards fail to do this and fake drugs get into the country and people buy the drugs and rather than get healed, get their cases complicated, it means they will be unable to earn income during their period of illness and this will affect their economic well being. 'After losing income for about one year, many people are unable to get out of the poverty circle because over the period they would have amassed a lot of debts which will cripple them economically,' the Economics Professor said.His submission, 'wherever there is corruption, you find poverty because corruption stalls the proper distribution of wealth, corruption engenders inequality, which is the foundation for poverty.'Unfavourable government policiesAnother cause of poverty is unfavourable government policies. In Nigeria, as in many other countries, the economy is subjected to the whims and caprices of the government. A single government policy can either lift millions out of poverty or sink them deeper into poverty. At the moment, the Federal Government is contemplating withdrawing subsidy from petroleum products. People have viewed this differently. The Organised Private Sector (OPS) has lent its voice to the removal, saying it would not affect the cost of doing business because, according to Alhaji Aliko Dangote, President of Dangote Group, the OPS had been paying market price for diesel for about 10 years.But a number of people think differently, they are of the view that the subsidy removal would have a crippling effect on the well being of a majority of Nigerians. The Nigeria Labour Congress (NLC) has said that it would result in Nigerians paying more for petroleum products, which would make a nonsense of the minimum wage of N18,000 that was recently approved by the government.According to the antagonists of the subsidy withdrawal, it would have a spiralling effect as prices of other items would also be hiked. According to Mr Owei Lakemfa, NLC General Secretary, 'This move is to push Nigerians to anger; Nigerians should not accept it; it is a pity that after 51 years of independence, the leadership of this country is taking instructions from the IMF (International Monetary Fund) and the World Bank. NLC will mobilise the rest of the country to resist any move by the government to increase the prices of petroleum products. This is totally unacceptable.'The NLC is not alone in its belief that the IMF and the World Bank's prescription may not be in the best interest of the ailing economy. Susan George, the internationally renowned political scientist, also believes that kowtowing to the whims and caprices of the Bretton Wood Institutions will increase rather than reduce poverty in a developing country. She is of the opinion that many developing nations (including Nigeria) are enmeshed in poverty partly because they have swallowed hook, line and sinker the recommendations of these two international financial institutions.In her book, A fate Worse Than Debt, while denouncing the policies of the two bodies for promoting debt and poverty, she writes, 'The IMF cannot seem to understand that investing in ' a healthy, well-fed, literate population ' is the most intelligent economic choice a country can make.'This view is also shared by Anup Shah, Editor of Global Issues, who says, 'The IMF and World Bank have demanded that poor nations lower the standard of living of their people.'So, whether poverty is on the increase or decline in an economy is a function of the economic policies pursued by the government. The policy pursuit of the government cannot be divorced from the perspective of those in government which is shaped by what they have been and where they have been. An economy driven essentially by graduates of Bretton Wood Institutions can only witness depreciation in the citizens' standard of living, which is the rule where they have been.Poor investment in educationPoor investment in education also escalates poverty. The 2011 Ibrahim Index of African Governance scored Nigeria 49 per cent in the area of education. This is less than the continental average put at 51 per cent. The 2011 Little Data Book on Africa, compiled by the World Bank, puts gross primary school enrolment vis-a-vis relevant age group at 93.1 per cent, but puts gross secondary school enrolment (percentage of relevant age group) at 30.5 per cent. The implication of this is that while almost all children of primary school age are enrolled in primary school, only 30 per cent of them proceeds to secondary school. The number of out of school children in the country is put at over eight million.The 2010 Global Monitoring Report of the United Nations Education, Scientific and Cultural Organisation (UNESCO) has this to say about the nation's state of education, 'Sub-Saharan Africa has registered remarkable progress since 1999 in reducing its out-of-school population by nearly 13 million, down to 32 million in 2007. Yet the deficit remains large: one-quarter of the region's primary school age children were out of school in 2007, and the region accounted for nearly 45 per cent of the global out-of-school population. Nigeria alone represented over 10 per cent of the global total.'But that was not the case in the 1960s. Then, investment in education was high, especially as the nation's leadership at the time saw education as the key to economic, technological and intellectual development of the young country. The mantra then was, 'Show the light, and the people will find the way.' Then, there was massive investment in education and this reflected in the state of the schools which buoyed the standard of the institutions as they competed favourably with world-class institutions. The populace responded by enrolling nearly every school age child in schools. The transition rate from primary to secondary was high; the same for from secondary to the tertiary institutions. This continued into the 1970s.But then, the trend changed, fund allocation to the sector reduced, a development that led to a decline in the infrastructure in schools as well as teachers being owed salaries and they embarking on endless industrial actions. This affected the enthusiasm of pupils and their parents, especially as many parents had withdrawn their children from farms to go to school in the first place. Many of the children were withdrawn from school and either returned to farms or were apprenticed to learn a trade. Since then, convincing some parents to allow their children to return to school has been a Herculean task, despite subsisting laws compelling parents to ensure that their children are enrolled in school.Commenting on the negative impact of illiteracy on a country, Kochiro Matsuura, Director General, UNESCO, stated that, 'An illiterate person is simply more vulnerable to ill-health, and less likely to seek medical help for themselves, their family or their community. Literacy is a powerful yet too often overlooked remedy to health threats, with the potential to promote better nutrition, disease prevention and treatment.'He added that the Millennium Development Goals (MDGs), whose target is the eradication of poverty cannot be reached without a literate population. The bottom line is that the illiterate and the barely literate are susceptible to poverty.Inability to access creditThe difficulty associated with accessing credit in the country is also a factor in the spread of poverty. Despite several attempts by the government to increase access of the poor to credit, it has been almost impossible to get this done as there are so many institutional roadblocks that hinder the poor from accessing credit.The Federal Government, through the Central bank of Nigeria (CBN), came up with Agricultural Credit Guarantee Scheme Fund, Agricultural Credit Support Scheme and Commercial Agriculture Credit Scheme to ease farmers' access to bank credits in recognition of the fact that agriculture is a major contributor to the country's GDP. But farmers have been having a difficult time accessing the funds because of the conditions attached to borrowing.As explained by Chief Dan Okafor, President of Potato Farmers Association of Nigeria (POFAN), potato farmers had tried to access credit from some banks without any success. The refusal of the banks to extend credit facilities to the farmers, according to Okafor, was on two premises. First, the conditions were very difficult for small scale farmers to satisfy; then the banks also claimed that only N40 billion was set aside for small scale farmers and they were not permitted to start disbursing the money because the CBN had not yet given guidelines on how to distribute the sum meant for small scale farmers.He said further, 'Our members have very big farmlands in Nyanya, Mararaba and many other places but they said we cannot get this loan so the Federal Government needs to do something if they really have us farmers in their heart."We had a meeting with some bank officials on the issue of the loan and it is clear that the government has not gotten it right and we would continue to worry them while hoping that things would change", he said.According to him, the attempt by his members to access the funds in microfinance institutions did not yield any worthwhile result either since the microfinance banks were also charging very high rates.Similarly, the Federal Government, through the CBN, instituted the N200 billion Small and Medium Enterprises (SME Credit Guarantee Scheme (SMECGS) to promote access to credit by small and medium enterprises. The intention was that if these categories of business had access to credit, they would become active commercially and be positioned to create job opportunities for a number of Nigerians.But just as is the case with farmers, so it is with small scale entrepreneurs, accessing the funds is a nightmare because of the conditions attached. According to the guideline provided by the CBN, 'For the purpose of this scheme, a Small and Medium Scale Enterprise (SME) is an enterprise that has asset base (excluding land) of between N5million 'N500 million and labour force of between 11 and 300.'After fitting the description, to be eligible for credit, the borrowing outfit must be a wholly-owned and managed Nigerian private limited company registered under the Companies and Allied Matters Act of 1990; a legal business operated as a sole proprietorship; a start-up company with satisfactory cash flows indicating a fixed asset cover ratio of 100: 150; a franchise; have no non-performing or delinquent loans with any financial institution; be a member of the Organized Private Sector bodies/associations such as Nigerian Association of Small & Medium Enterprises (NASME), the Manufacturers Association of Nigeria (MAN), etc; have a clear business plan; provide up-to-date records on business operations, if any; satisfy all requirements specified by a participating bank.Idris Olabode Badiru in a publication of the International Food Policy Research Institute entitled Review of Small Farmers Access to Agricultural Credit in Nigeria posited that only 18 per cent of small scale farmers have access to financial services.He added that, 'small-scale farmers have relatively more access to informal and semiformal credit institutions than to formal credit institutions, in spite of the higher volume of credit at the disposal of formal institutions. In addition, the high repayment rate of loans recorded by informal and semiformal institutions could indicate that the loans are granted at affordable rates to the small-scale farmers and that subsidisation may not be necessary. It was also found that access to credit is likely to help improve the well-being of the beneficiaries.'So, a combination of these factors as well as others have distanced most Nigerians from income earning opportunities and as a result they are subjected to sub-standard existence as many battle with common diseases, live in slums, earn income that cannot ensure decent living even as many make a living out of begging for alms, situations occasioned by poverty.Government's anti-poverty efforts The Nigerian government has consistently reiterated its commitment to poverty reduction in the country. The first of the government efforts to scale down poverty in the country was Operation Feed the Nation (OFN) which was introduced by General Olusegun Obasanjo in 1979. The focus of the programme was to encourage Nigerians to embrace agriculture for the purpose of solving two poverty-related problems; malnutrition and unemployment.OFN was replaced with Green Revolution which was introduced by former President Shehu Shagari in 1980. The focus of this programme was similar to its predecessor's.The first administration to address access to credit by the poor as a way of alleviating their poverty was that of General Ibrahim Babangida. The administration started the now defunct People's Bank, which had a mandate to provide funding for entrepreneurs that could not access funds in conventional banking institutions. It also introduced community banks, which were meant to assist rural and poor people. Babangida's administration also introduced the Directorate of Food, Roads and Rural infrastructure (DIFRRI). This outfit was meant to open up rural areas while providing them with basic amenities for the purpose of increasing commercial activities in the areas. It was also the administration that started the National Directorate of Employment (NDE) with the mandate to develop programmes that would combat mass unemployment.General Sani Abacha, who became Head of State in 1993, established the Family Economic Advancement Programme (FEAP) as an agency to fight poverty in the country. The modus operandi of the agency was to disburse loans to families through cooperative societies.General Obasanjo, in his second coming as the nation's head, introduced the National Poverty Eradication Programme (NAPEP) to coordinate all anti-poverty programmes in the country from the local government to the federal level.The Federal Government has also demonstrated its willingness to fight poverty by identifying with the United Nations MDGs. The UN in Year 2000 set 2015 as the target year for developing countries to record some progress in certain developmental areas with a view to scaling down poverty. There is a Senior Special Assistant to the President on MDGs.While there is no doubt that some progress has been recorded by the government in its poverty alleviation activities, the fact that independent international organisations say that 92 per cent of the country's over 150million population live below the poverty line casts a pall on the efforts of the government. What the verdict portrays is that the efforts of the government have not yielded encouraging results despite the billions of naira that has gone into the programmes.Three reasons are probably responsible for the unimpressive results of the anti-poverty programmes. The first is that the programmes were politicised. The intention behind most of the programmes was not to extricate the suffering masses from their poverty and anguish but to make a political statement. OFN and Green Revolution were similar in concept and execution, therefore there was no real reason to scrap the former and replace it with the latter. So, rather than strengthening the programme to make it more relevant to the people, it was scrapped and a lot of money went into starting the same programme under a new name.In the same vein, the mission of the FEAP was not different from that of the People's Bank; it was to make credit available to the excluded people. So, there was no real reason for FEAP. What was required was for People's Bank to be strengthened to make it deliver more on its mandate. So, the politicisation of the programmes affected their impact on the poor.The second reason for the seeming ineffectiveness of the poverty alleviation programmes is corruption. Because of the pervasiveness of corruption in the country, operatives of the poverty eradication agencies often work at cross purposes with the objective of the agencies by converting funds meant for the masses to personal use. So, as a result of corruption, rather than the poverty reduction programmes reducing the number of the poor, it increases the number of the rich.The third factor is the failure of government to institute a system of assessing the success of the programmes. There is no feedback mechanism by which the government can hear directly from the poor on how effective or otherwise the programmes are. By the time it gets to the government that the programme is off target, it will be too late to do anything about it.So, until poverty alleviation programmes are divorced from politics and corruption and a mechanism for assessing their success is instituted, poverty alleviation programmes will be mere motion without movement.
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