At the end of the 2013 Spring Meetings of World Bank Group/IMF, world financial leaders avowed to two specific global agenda. First, a historic opportunity to end extreme poverty within a generation, the global target of reducing extreme poverty rate, the number of people living on less than $1.25 a day to three per cent by 2030. Leaders at the meeting agreed that this is ambitious. Achieving this goal will require strong economic growth across the developing world, as well as translation of growth into poverty reduction to an extent not seen before in many low-income countries.
World financial leaders, including those from Nigeria, equally endorsed the second proposed goal, to promote shared prosperity. This will entail fostering income growth of the bottom 40 per cent of the population in every country. Nigeria’s future economic growth measurement will be based on how policies have helped to reduce the alarming inequality between the haves and have-nots in the country. Sustained economic growth in this regard needs a reduction in inequality. Government functionaries must come to terms with the fact that shared prosperity means creating opportunities for all citizens, promoting gender equality and focusing on those who, although not currently poor, are vulnerable to falling into poverty.
Unfortunately, in Nigeria we celebrate economic growth that is not accompanied by job creation and poverty reduction. To meet the new target, Nigeria’s policymakers must put on their thinking cap and develop unique policy measures that will create jobs, and get a larger number of members of the society into gainful employment. This requires mass mobilisation of the populace and moving away from rhetoric to real action. Nigerians have come to the hard reality that the various government policies since 1980 have contributed to the rising level of poverty in the country despite claims that the economy has been growing. The poverty data released by the National Bureau of Statistics suggested that 112 million Nigerians are poor going by the economic situation in the country in 2011. While 100 million are in absolute poverty, 12.6 million are moderately poor. The question then is, what do we do with this data? If Nigeria is to meet the new challenge of reducing extreme poverty to three per cent, policymakers must focus on meeting the needs of the 112.6 million Nigerians that are currently living below N170 per day.
Nigeria does not have to reinvent the wheel of economic progress; all that is required is to motivate the private sector into agriculture and housing construction.
These two sectors of the Nigerian economy are capable in a very short while to create and absorb almost the 112.6 million Nigerians into direct and indirect gainful employment. Housing generally on the supply side can be a very strong driver of economic growth if properly handled. There are so many linkages within the economy as regards housing employment. Once you start driving the housing and construction sector, there will be employment for carpenters, welders, masons, interior decorators, etc. It is a whole lot of linkages. Housing construction in economic models is a perfect instrument. That is why developed economies monitor housing gaps every month. One of the key indicators they report is how many houses have been built, how many old houses have been purchased, and you have the index that measures the movement of housing crisis within the economy. This is the time for this government to make a policy change that will use housing as an economic policy instrument to reduce poverty in the land.
As the Cordinating Minister of the Economy, Dr. Okonjo-Iweala said in Washington that government has decided to create a mortgage refinancing institution that will be mainly private sector-held. Government will only be a motivator and will have a small share in it. The partners in it are the banks, which is why the CBN has a key role in it. The CBN is a partner. We will be looking for other investors, and hence, the document has been prepared to attract domestic and foreign investors into the housing sector. If government is already aware of the housing potential in poverty alleviation, policy must be directed at this.
Volunteers, governors who have indicated their preparedness to lift the constraints on land titling should help to release land and prepare infrastructure and any of the other accompanying measures must see it as a call to national duty. Lagos, FCT, Bauchi, Niger, Anambra must show others that the key to growing the economy is on housing and agriculture.
Poverty data shows that there is a lot of work for the government to do to uplift a huge portion of the populace out of poverty. It also shows that there is a significant scope for the private sector to participate in activities that will have a direct impact on the people at the bottom of the pyramid.
The poverty rate in the country must be seen as an opportunity to invest in people and resources. The data should be looked at in a positive sense, and not in a derogatory manner.
Given the extended family structure of most families in Nigeria, especially those in the rural areas, by virtue of Nigerian culture, the well-to-do in the families know that the society expects them to assist those not so blessed, especially from the financial perspective. Nigerians that are well-to-do must stop dishing out handouts to the poor. They must begin to set up those at the bottom to fend for themselves.
Relevant government agencies responsible for planning the nation’s economic development must roll up their sleeves and treat economic empowerment with a higher sense of urgency and tact. An opportunity also exists for the private sector to tap into the potentials of the bottom of the pyramid economics in a collaborative win-win way. Multilateral institutions and NGOs may also be able to have increased participation in measures geared towards poverty alleviation in Nigeria, if their charters so allow. Above all, provide regular power supply and Nigeria will fly in the economic space.