Charles Nwaoguji and Merit Ibe
The Director General of the Lagos Chamber of Commerce and Industry (LCCI) Dr. Muda Yusuf, has called for proactive measures to tackle increasing rates of poverty and unemployment in the country.
He said this while reviewing performance of the economy after 21 years of democratic governance.
“Nigeria has earned enormous goodwill as one of the few stable democracies in Africa. The economy has benefited from this goodwill as investors are generally more comfortable with a democratic environment. However, Nigeria needs core democratic values to address poverty and unemployment in the system. He said,
“The present administration’s performance, from a socio-economic and welfare perspective, was not up to scratch. The data on trends in per capita income, poverty, unemployment and food inflation supports this position. Per capita income fell steadily between 2015 and 2018.
Although dataset ended in 2018. However, judging from present realities, GDP per capita fell further in 2019 as population growth rate (estimated at 2.7 per cent) exceeded GDP growth (2.27 per cent) in 2019.
“The performance from poverty reduction perspective gives cause for concern. In 2018, Nigeria overtook India as the country with the world’s most extreme poor people despite India having a population seven times larger than Nigeria’s.
“According to the World Poverty Clock, the number of extremely poor Nigerians rose to 91.6 million in 2019 from 87 million in 2018, implying that close to half of Nigerian’s population size live below the poverty line.
“A more recent data by the National Bureau of Statistics (NBS) put poverty rate at 40 per cent in 2019, indicating that 80 million Nigerians are in poverty. Worsening poverty situation in Nigeria is partly driven by rising cost of living, particularly prices of food products.
“The acceleration in average food prices from 9.9per cent in 2015 to 13.7 per cent in 2019 reinforces this position. Other factors are inadequate investment in social infrastructure, education and health, at all levels of government, quality of infrastructure which is a major limiting factor to productivity growth in the economy.”
Meanwhile, the Chamber has disclosed that the Central Bank of Nigeria (CBN)’s interventions for households and businesses as palliatives for lending amid COVID-19 have largely been tilted more towards formal establishments with the relief largely excluding businesses that need them most –informal sector participants.
The Chamber explained that despite the support of Organised Private Sector (OPS) of the relief packages by the apex bank, many informal sector businesses, whose activities account for up to 65 per cent of Nigeria’s Gross Domestic Product (GDP) are complaining about accessing the facilities at the commercial banks.
The Chamber made the disclosure in its Economic and Business Brief: titled: ‘Supporting the Informal Sector of the Nigerian Economy.’
The DG alluded to the fact that even if the outbreak is contained, the informal economy will continue to grapple with the catastrophic impact brought on by the pandemic, adding that this might see many informal enterprises go out of business amid weak macro fundamentals (weak growth, rising inflation, depressed aggregate demand, low investment), thereby rendering millions of individuals jobless.
According to him, the bleak outlook for the macroeconomic environment in the short-term means very tough times ahead for informal businesses in Nigeria.