What bank survey says about the rate of poverty in Nigeria

macfranc007 February 06, 2018 Nigeria News today & Breaking news ▷ Read Nigerian newspapers 24/7 Onyirioha Nnamdi

- The African Development Bank (AfDB) reports that Nigeria still faces significant challenges, like foreign exchange shortages, disruptions in fuel supply, power shortages and insecurity

- AfDB notes that Nigeria's Value Added Tax (VAT) rates are among the lowest in the world, and that revenue administration is inefficient

- It maintains that the implementation of the economic recovery and growth plan (2017 - 2020) will help Nigerian economy overcome crude oil-dependency

The African Development Bank (AfDB) recently reported that about 152 million Nigerians live on less than $2 a day, which represents about 80% of the country’s estimated 190 million population.

AfDB, in its 2018 Nigeria economic outlook, report stated that the level of poverty in the country is unacceptably high, The Punch reports.

The report stated: “Nigeria still faces significant challenges, including foreign exchange shortages, disruptions in fuel supply, power shortages and insecurity in some parts of the country.

“Revenue mobilisation efforts are insufficient; at five per cent, Value Added Tax rates are among the lowest in the world, and revenue administration is inefficient.

“Poverty is unacceptably high; nearly 80 per cent of Nigeria’s 190 million people live on less than $2 a day.”

The report pointed out that the recovery in oil prices and production would promote growth and provide fiscal space as the government pursued important structural reforms to achieve diversity in the economy.

AfDB made it known that faithful implementation of the economic recovery and growth plan (2017–20) will help Nigerian economy overcome oil-dependency.

The plan pay attention to six major sectors: agriculture; manufacturing; solid minerals, including iron, gold, and coal. It focuses also services like information and communications technology, financial services, tourism, and creative industries, construction and real estate;, and oil and gas.

Concerning Nigeria's economic performance in 2017 and prospects for the future, the AfDB noted: “The economy continued to show signs of recovery from the 2016 recession. The Gross Domestic Product growth was estimated at 0.8 per cent in 2017, up from -1.5 per cent in 2016.

“The outlook beyond is positive, with growth projected at 2.1 per cent in 2018 and 2.5 per cent in 2019. This outlook is anchored on higher oil prices and production, as well as stronger agricultural performance.

“Oil prices rebounded to an average of $52 per barrel (Brent crude) in 2017 and are projected to reach $54 in 2018, up from $43 per barrel in 2016.

“Oil production also increased from 1.45 million barrels per day in the first quarter of 2017 to 2.03 million in the third quarter of 2017 following de-escalation of hostilities in the delta region and is expected to remain at the same level in 2018 and 2019, in tandem with the Organisation of the Petroleum Exporting Countries production restrictions.”

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The AfDB revealed that fiscal policy remained expansionary in 2017 just as in 2016. Although total spending as a percentage of the GDP declined from 13% 2014 to 10.3% in 2017, revenues declined more sharply, from 11.4 per cent to 5.6 per cent.

It said: “The budget deficit was estimated at 4.8 per cent in 2017, up from 4.7 per cent in 2016, and is projected to improve to 4.3 per cent in 2018 and 4.1 per cent in 2019, as revenue performance improves.

“At 14 per cent, unemployment remained high in 2017, the same as in 2016, and is expected to decline only slightly in 2018, to 13.5 per cent, as recovery eases production constraints in manufacturing and agriculture.

"Monetary policy continued to contract in 2017 and is expected to remain so in 2018; the policy rate has been kept at 14 per cent since July 2016 to support the naira and control inflation. Inflation has remained stubbornly high and in the double digits.”

Earlier, NAIJ.com reported that AfDB statement indicates that it had withdrawn its proposed loan to Nigeria totaling $400 million (N143,800,000 billion). The Nigerian government had sought the loan to fund it’s budget which had been financially deficient due to falling crude oil prices.

A vice president at the lender however said the development bank had decided to channel the money into specific projects.

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