Buhari’s government did not throw 133m Nigerians into poverty
It is Peter Drucker- the management guru that is often quoted to have said: “you can’t manage what you can’t measure.” But I wish to follow up with an addition that is as relevant and critical, which is: “if you can’t measure it, you can’t improve it”. These quotes are important premises for this discourse.
On Thursday, November 17, the federal government launched a new tool for measuring poverty in Nigeria, which found that 63% of people – 133 million Nigerians out of an estimated population of 211 million – are multi-dimensionally poor. This new tool: Multidimensional Poverty Index (MPI), has been deployed in over 100 countries and defines poverty as the overlapping combination of deprivations that people can face in several areas of their lives. This is markedly different from the narrow focus on only monetary poverty measurement.
In fact, it is not only the hitherto narrow focus on monetary poverty measurement that the MPI has exposed, it has also exposed how largely unaccountable subnational governments have been in the management of public finance.
It is important to note that while the recently launched Nigeria Multidimensional Poverty Index- MPI (2022) provides a new perspective on poverty, it complements rather than replaces monetary poverty data. Likewise, it does not measure the same households in its sample as Nigeria’s monetary poverty line, but through its 15 indicators grouped under four dimensions of health, education, living standards, and work and shocks, it sheds further light on the lived experience and nature of poverty for Nigerian households.
Between monetary and MPI – which is better? While their results differ, both provide a holistic insight into the poverty status of the country.
The proportion of the estimated 211 population in Nigeria who are multi-dimensionally poor is higher at 63% (133 million) than the proportion of the population (40.1%) living below Nigeria’s poverty line of Naira 137,430 per person per year, based on the 2018/19 Nigeria Living Standards Survey (NLSS), by the National Bureau of Statistics (NBS). Notwithstanding the 2018 lower monetary poverty figures, monetary poverty status of Nigeria remains lower as of today. Based on the World Data Lab poverty model, with a poverty threshold of $1.90, the World Poverty Clock calculates that in Nigeria, people living in extreme poverty in monetary terms are 69.9million; that is, 32% of the estimated population of 215 million used for its projections.
These figures are important to highlight in the first place in order to lay the foundation for the facts stated below:
Nigeria is NOT the poverty capital of the world- not in multidimensional terms or in monetary values. According to the World Bank, currently, the top 10 countries with the highest monetary poverty rates in the world are: South Sudan – 82.30%; Equatorial Guinea – 76.80%; Madagascar – 70.70%; Guinea-Bissau – 69.30%; Eritrea – 69.00%; Sao Tome and Principe – 66.70%; Burundi – 64.90%; Democratic Republic of the Congo – 63.90%; Central African Republic – 62.00%; and Guatemala – 59.30%.
Meanwhile, according to the Global MPI conducted in 111 countries and released in September by UNDP and the Oxford Poverty Human Development Initiative (OPHI), India has by far the largest number of poor people worldwide at 22.8 crore. The global MPI is an internationally comparable index computed by OPHI and the UNDP on multidimensional poverty, using data available across the 100+ countries being studied.
The Nigeria Multidimensional Poverty Index- MPI (2022) was conducted in the 109 senatorial districts across the 36 states, including the Federal Capital Territory (FCT). As detailed in the report, the highest contributor to the 133 million poor people is from those living in rural areas; that is, within local government areas and at ward levels. The result breakdown shows nationally that 132.92 approximately 133 million persons are poor; rural areas contribute a total of 105.98 million to this figure; with urban areas contributing 26.94 million. These rural areas contributing the most to the country’s poverty status are outside of the federal government’s obligations but sit squarely within the jurisdiction and legal responsibilities of sub-national government, that is, state governors and local government chairmen and councillors. The surveys conducted were at Primary Healthcare Centres (PHCs) for the MPI Health dimension; and in primary schools- for the Education dimension. PHCs and primary schools are the responsibilities of the sub-national government.
The federal government has now with the deployment of the MPI measurement tool and these findings placed in the hands of state governors, LGA councillors, the legislature, private sector, and other key stakeholders, a policy tool to help address the overlapping, multi-sectoral deprivations that people face. It is only when the sub-national government collaborates with the federal and adopts this data-driven and evidence-based approach to governance that we can truly and positively change the trajectory of poverty in our country.
The MPI is not just a measurement tool, but one that helps with behavioural and perception change. Nigerians need to understand that because an individual earns a daily income above $1.90, that is, NGN850, that this does not automatically mean the individual is not poor. This is the crux of the perception change that the MPI brings to fore and seeks to change. For example, in Bayelsa- currently the second poorest state after Sokoto, the proportion of multi-dimensionally poor children under-five is above 50% in all states but greater than 95% in Bayelsa. This means that even though, a household may earn above the daily income of NGN850 or NGN135,415 per annum per capita, if a child within this household is deprived in child indicators such as in nutrition, school attendance, child engagement and across the 15 MPI indicators, such household and child are identified as multi-dimensionally poor.
This new understanding of poverty beckons on ordinary Nigerians to demand for accountability in government, especially at sub-national levels where poverty is most prevalent. This kind of attitudinal change also requires changes in the choice architecture of who we vote into elective positions. When social and economic investment decisions are not based on data evidence such as the MPI provides, we will continue to perpetuate the circle of poverty, given the current approach where state governors continue to invest and compete in borrowings to build monuments like airports and flyovers even when data provide evidence to the contrary.
Poverty in Nigeria traditionally has been measured using the monetary approach. This approach analyses the consumption and expenditure of a household to estimate their living standards. The last monetary poverty estimate as reported by the National Bureau of Statistics, was 40.1 percent for 2019, pre-Covid. The 2022 Multidimensional Poverty Index Survey results as published by the same agency uses a completely different method in assessing the poverty status of an individual or household. Unlike the monetary measurement, it uses deprivations in basic amenities as a means of assessing poverty.
Globally, where both measures have been used, the multidimensional measure more often records a higher level since it considers a range of issues in arriving at a conclusion of a person’s living standard. As clearly stated in the 2022 Multidimensional Poverty Index Survey report, this survey is the first standalone MPI Survey to be conducted in Nigeria with this level of disaggregation. It also indicates that poverty is predominantly a rural phenomenon, particularly when considering the dimensions driving poverty in each state, which vary from state to state. This survey exercise was commissioned with the intent of using it as a diagnostic and policy-making tool to address issues of poverty, as it clearly spells out the areas, which government at all levels can work on to improve the living standards of citizens.
Given the above, the idea, therefore, that the Federal government has thrown 133m people into poverty after committing to lift 100m people out of poverty in 10 years, is false and misleading. Nonetheless, the federal government remains unflinching in its efforts to address the root causes of the multiple deprivations Nigerians face especially at sub-national levels and will continue to expand its social protection and poverty reduction strategies into states, to deliver on its commitment to lift millions out of extreme poverty.
- Prince Agba is Minister of State for Finance, Budget and National Planning and supervises the National Bureau of Statistics (NBS).