Last April, Nigeria’s chief statistician Yemi Kale announced the country’s GDP exceeded $500 billion for the first time, placing it above South Africa as the continent’s largest economy. Although significant, the news was not unexpected, as Nigeria’s GDP growth has exceeded that of Sub-Saharan Africa for the past six years, according to World Bank data, while the services, manufacturing and oil industries were booming.
The latest economic indicators for Nigeria have been telling of a more globalized economy with organic growth. A recent report released by The World Bank on Tuesday tells of an even more exciting reality — that of the poor being helped through the country’s economic expansion.
In the report launched in Abuja, Nigeria’s household surveys from 2011-2012 and 2012-2013 revealed that the poverty rate is at 33.1 percent, not at 35.2 percent as previously thought. The report also indicated poverty decreased as a result of increased government revenues, stabilized foreign reserves and a boost in crude oil exports.
However, the report did note that reduction of poverty in Nigeria wasn’t universal. Poverty rates in urban areas are much lower than their rural counterparts and are decreasing at a greater pace, the report said. John Litwack, economist at The World Bank, contends the numbers “indicate the prime importance of urban areas for growth and poverty reduction.”
Another caveat to the data is where poverty is concentrated in the country geographically. Poverty rates in the North West region of Nigeria tend to be much higher than those in the North Central region, and the rate at which poverty is decreasing varies greatly. Uneven levels of economic expansion could incite civil unrest and social distrust if they swell to extreme levels.
For the 58 million who are still in poverty in Nigeria, the data is encouraging but not convincing. Foreign investors still worry about the volatility of oil prices in the international market; crude oil production is one of the major reasons Nigeria saw significant economic expansion in recent years, but the market could take away the same capital it gave to Nigerians in the past.
To ensure that poverty rates continue to decrease, the Nigerian government, coupled with investors at the private and institutional levels, need to ensure that investments aren’t saturated in any particular sector. Healthy growth in Nigeria’s economy can lift millions out of poverty and improve Nigeria’s economic standing in Africa and the international community at large. But the means to achieve and maintain that growth will be determined by the policy decisions of those inside and outside of Nigeria, as well as the international market.
– Joseph McAdams