Breaking the Nigerian poverty cycle through entrepreneurial revolution (1)

Nigeria is a country of absurd economic realities.
The 13th largest crude oil producer in the world and
the second largest economy in Africa earn an
estimated $2.2 million a day in oil revenue.
Yet, its GDP per capita, at just over $1,400, is
among the lowest for the continent and 54 per cent
of its 148 million people live on less than $1 per
day.
The figures are especially shocking because of the
abundance of natural resources primarily oil and
natural gas, and massive agricultural potential
based on its climate and significant rural population.
Human development data for Nigeria has remained
persistently bleak despite a considerable upturn in
the country’s economic fortunes since 2000.
The UNDP ranked the country 80th in a poverty
survey of 108 developing nations that focussed on
severe deprivation.
The agency gave Nigeria a Human Poverty Index of
37.3, placing it below more impoverished African
neighbours with far smaller economies like Rwanda
and Malawi. Significantly, the study looked not just
at income destitution, but also at secondary aspects
including education, access to health care, standard
of living and life-expectancy.
More than 67 million Nigerians are docketed as poor
according to standard definitions, while 35 per cent
of the total population live in extreme poverty.
These recent trends are especially worrying
because they parallel a significant but contradictory
improvement in performance. Before the current
global financial crisis set in, Abuja had been
successful in wielding substantial positive change
in its overall balance sheets through a process of
re-prioritisation and economic reform since 1999.
A slew of measures, including privatisation of
several steel, petrochemical, mining and port
entities helped develop the non-oil sector, bring
down inflation and boost international currency
reserves. Nigeria also successfully negotiated with
the London and Paris clubs to do away with a large
part of its foreign debt.
However, World Bank research confirms that even
during periods of relative prosperity, poverty levels
remained unabated in the broadest sense, and
actually worsened during successive positive
growth periods.
Between 1972 and 1980, for instance, the Nigerian
per capita income shot up from $1,300 to $2,900
based on rapidly escalating oil prices. A subsequent
decline in global oil revenues dragged down per
capita income, consumption and expenditure to
critical levels.
However, Nigeria neglected investment in human
development projects and continued to pump
borrowed finances into capital-intensive
enterprises.
The fallout was that the dramatic rise in national
fortunes bypassed the majority of Nigerians, as
evident from the negligible rise in per capita
consumption figures for the same period.
The differential effect on poverty levels in rural and
urban areas for the coinciding period is equally
startling. Because of a simultaneous worsening of
income distribution, rural poverty declined slightly
while the number of urban poor gained.
However, the worst-off were also the worst losers,
as the population living in extreme poverty across
Nigeria swelled up from 10 million to 14 million. The
obvious explanation behind this is that policy
makers sorely failed to share the increase in wealth
equitably.