Multidimensional Poverty and Insecurity are Inextricably Linked

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Sunday, February 14, 2021 08:00 AM / by FDC LtdHeader Image Credit: Businessday


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Growing insecurity in Nigeria in recent years has coincided with rising poverty levels as Nigeria now has an estimated 91 million people (43% of its population) living in extreme poverty (less than $2 a day)2. This is up 29% from 70 million in 2016 and this is projected to reach 106.6 million by 2030. Nigeria is now regarded as the world's poverty capital.

 

The twin shocks of the coronavirus pandemic and the oil price collapse triggered another economic crisis. Like most oil shocks in the past, it was followed by worsening external imbalances and a devaluation of the naira. Every naira devaluation has pushed more and more Nigerians into poverty as the country's import dependency for its consumables means the average consumer can afford less than he used to. The poor got poorer while inequality widened. The poverty of today is as a result of low investment in the education sector of 10 years ago. This is evident in the number of out of schoolchildren (41mn according to the UNICEF). This implies that one in every five of the world's out of school children is in Nigeria.

 

Insecurity Pushes Nigeria on the Brink 

Nigeria is currently grappling with security challenges ranging from farmer/herder clashes, cattle rustling, banditry, kidnapping and the Boko Haram insurgency. The situation has deteriorated significantly since 2017 with most of the incidents occurring in northern Nigeria and the middle belt. The disruption to lives and livelihoods and the surge in the number of internally displaced people is on the verge of triggering a humanitarian crisis. Many displaced people are being pre-vented from accessing vital services such as healthcare, and farmers are unable to plant or harvest crops.

 

In some cases, armed bandits insist on payments before farmers can have access to farmlands in the planting season. They return during the harvest season and extort farmers for further payments before any access is granted. This has led to scarcity and a surge in the prices of certain food commodities. According to ReliefWeb, as much as 5.1 million Nigerians are at high risk of being critically food insecure between June-August 2021. This situation is exacerbated by a second wave of COVID-19 in which Borno, Adamawa, Yobe states (Boko Haram hotspots) have record-ed new cases.

 

What began as localized clashes between farmers and herders over access to land has degenerated into a major conflict and loss of lives across the north. In late 2020, dozens of rice farmers were massacred in Borno state - their crime was cooperating with the military. Boko Haram extremists have claimed responsibility for the attacks. According to the Global Terrorism Index (GTI), Nigeria is the third most terrorized country in the world, after Afghanistan and Iraq. Total terror-related deaths were estimated at 1,245 in 2019 and 1,606 in 2020. Total deaths are estimated at 22,441 since 2001. 

 

Perverse Incentive 

Many have pointed to rising poverty, inequality and a lack of opportunity, especially among the youth, as the major cause of insecurity. Others have also emphasized the part played by Nigeria's weak security infrastructure to tackle the menace of terrorism, banditry and kidnapping. Successful bandits and kidnappers embolden even more bandits and kidnappers. In addition, the perverse incentive system (amnesty) that seemingly rewards repentant terrorists disproportionately creates an attraction for many youths who have been conditioned by poverty and destitution to think that they have little to lose and, on the face of it, everything to gain.

 

Both Cause and Consequence 

Poverty has both been a cause and consequence of insecurity. In times of heightened insecurity and instability, the danger to lives and property means increased uncertainty as businesses stay closed or offer skeletal services, consumer and investor confidence fall and business expansion is almost non-existent. Foreign direct investment (FDI) flows into Nigeria fell by 21% to $2.61bn in 2020 due to the coronavirus pandemic. This figure is expected to rise in 2021 but will be held back by rising insecurity. Insecurity also delays the construction of critical transport infrastructure, which should, ordinarily, improve logistics and bolster economic growth. It is also noteworthy that insecurity has risen sharply in northern Nigeria, where populations are poorer and state governments get less revenue for sharing.

 

The resolution of multidimensional poverty remains one of the biggest challenges facing Nigerian policymakers today. It is one that an entrenched system that promotes sharing rather than pro-duction has so far failed to tackle. Nigeria's weak economy is a consequence of its over-reliance on oil & gas and its failure to strengthen its institutions and invest in infrastructure. Empirical evidence from countries with success stories in pulling millions of people out of poverty, like China, points to sustained economic growth over extended periods as the barest minimum required. China achieved double-digit GDP growth rate over two decades through economic reform and policies that created jobs and alleviated poverty in rural China, and the provision of social welfare. It never had to face issues bordering on insecurity - at least not on the scale being witnessed in Nigeria.

 

Ticking time bomb 

Nigeria's high unemployment (27.1%), large youth population and poverty rates mean it is effectively seating on a massive keg of gun powder. Plans to combat insecurity without tackling poverty and its root causes would be dead on arrival. Both plans must reinforce each other. The incentive to commit acts of terror and banditry must be outweighed by the threat and consequence of being caught. Pro-poor growth strategies and social welfare are crucial to alleviating poverty, but the government also needs to strongly expand its anti-terror capabilities and create a strong disincentive to the perpetrators.

 

A change of guard at the top of the military does in fact signal that the FG acknowledges that it could have done more in the past to end the stalemate with Boko Haram and it now intends to. Its success is critical to achieving sustainable economic growth in Nigeria.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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