Nigeria could have a fourth of the world’s extremely poor people within a decade if it does not ease unemployment and enact economic reforms to kick-start more growth.
The World Bank, in its economic update report, said that while it expects Nigeria gross domestic product to increase by 2.1% in each of 2020 and 2021, that figure falls below the country’s projected 2.6% population growth rate.
The bank recommended that the government of President Muhammadu Buhari remove costly fuel subsidies and cut central bank lending to sectors that pushes away other banks. The report also urged the country to increase domestic revenue, eliminate trade restrictions and improve the “predictability” and transparency of economic policy.
“The cost of inaction is significant,” the bank said. “Under a business-as-usual scenario, where Nigeria maintains the current pace of growth and employment levels, by 2030 the number of Nigerians living in extreme poverty could increase by more than 30 million.” TOP ARTICLES2/3China Says It Will Continue’Training’ Xinjiang People
As of 2018, half of Nigeria’s nearly 200 million people lived in extreme poverty. That year, it surpassed India as the country with the most people in extreme poverty.
The bank noted out of 115 million working-age Nigerians in 2018, 70 million were employed full- or part-time while 21 million were unemployed but actively looking for a job.
Due to rapid population growth, in the last five years, 19 million Nigerians entered the labor force. Over that same period, only 3.5 million jobs were created. As a result, 80% of new entrants into labor market ended up unemployed,
Between 2015 and 2018, the number of jobless almost quadrupled and the unemployment rate reached 23 percent.
The bank estimated nearly 30 million new jobs would have to be created by 2030 to keep the current employment rate stable.
“Today an estimated 100 million Nigerians live on less than $1.90 per day,” the bank stated. “Close to 80% of poor households are in northern Nigeria while employment creation and income gains have been concentrated in central and southern Nigeria.”
“Reforms would help achieve faster, more inclusive, and sustained growth with jobs,” said Shubham Chaudhuri, the World Bank country director for Nigeria.
The bank further warned if crude oil prices fell to $50 a barrel, the economy could sink into recession as it did in 2016.
Ogbonnaya Onu, minister of science and technology, said Nigeria’s economy is going through a phase in its transition.
“We are moving our economy away from commodity based to make sure that it no longer depends entirely on this but on knowledge and innovation,” he said. “This is exactly what Japan did and it became the second largest economy in the world, until they were overtaken by China not too long ago.”
Gbenga Olawepo Hashim, a Nigerian politician and activist, said Nigeria needs to have “a $4 trillion economy to become a middle income economy, and we have set up a strategy to achieve this.”
Hashim noted countries like Malaysia and Thailand – which were behind Nigeria economically during its early years of independence in the 1960s – have now far surpassed it in terms of GDP and prosperity.
Moreover, while Nigeria boasts the highest GDP in Africa (estimated at nearly $500 billion), on a per capita income basis, it remains one of the poorest states on the continent.
