On 4th May 2020, the National Bureau of Statistics (NBS) released new data on poverty and inequality in Nigeria based on survey carried out between September 2018 and October 2019. The data shows that 40.1% of Nigerians live below the national poverty line of N137,430 ($382) per year – representing about 82.9 million people.
With the current Coronavirus pandemic bringing Nigeria’s economy to a slowdown, these new numbers tell a tale of gloom for Nigeria’s poor.
Here are 3 key things you need to know about the new NBS data on poverty and inequality in Nigeria, and what it means for the country:
1. People who spend less than N 137,430 per year (on all goods/service) are POOR:
The national poverty line calculated by the NBS is N 137,430 per individual per year. This means that people whose annual consumption expenses (both food and non-food expenses) are below the national poverty line of N137,430 (i.e. N11,453 per month) are poor. So, if you depend on less than N11, 453 for your basic monthly living expenses, you are poor.
2. People living in the rural parts of the country are much more likely to be poor than those in urban areas
52% of Nigerians living in rural areas are poor compared to only 18% of Nigerians living in urban areas. The differences between the poverty rates in rural Nigeria and the poverty rates in urban Nigeria is large.
For instance, Sokoto (a largely rural state) is the state with the highest poverty headcount rate in the country at 87.73%, while Nigeria’s mega urban city-state, Lagos, is the state with the lowest poverty headcount rate in the country at 4.50%. The high poverty rates in rural Nigeria suggest that better economic outcomes are limited for the rural residents.
3. Most poor people are engaged in small-scale farming and this affects Nigeria's agriculture productivity.
A key point to note from the NBS poverty data is that high poverty rate in rural Nigeria is harming agricultural productivity. Nigeria has a productivity problem and the crux of this problem lies in its agricultural sector -- the largest employer of labor in the country. According to a 2018 World Bank data, 70% of the 97.2 million people living in rural Nigeria are subsistent small-scale farmers (i.e. 68.04 million farmers).
As economic outcomes are incredibly limited for rural residents in Nigeria who are mostly engaged in agriculture, this affects overall agricultural productivity. The implication is that national agriculture productivity will remain stagnant if small-holder farmers in rural Nigeria continue to struggle to sustain their livelihoods.
The NBS data reveal an economy that is disadvantageous to mostly Nigerians living in rural areas, and this adversely affects the country’s chances of improving agricultural productivity. To address this, the Nigerian government must make good of its promise to expand productive capacities, reduce dependency on oil exports, and develop rural areas.
Still Craving? Explore: National Bureau of Statistics
Article Credit: Basil Abia (guest writer)