The African Development Bank in a recent survey has revealed Poverty rate in more than half of the 36 states of the nation is above the national average of 69 per cent

The bank said this in its African Economic Outlook 2020
obtained by our correspondent in Lagos on Monday.

In a section of the report on Nigeria, the bank said
that poverty was widespread in the country, adding that
the national poverty rate was 69 per cent of the
population.

This means that out of the country’s reported 180
million people, 124.2 million people live in poverty.

With more than 50 per cent of the nation’s 36 states
having a poverty rate above the national average of 69
per cent, it means that the poverty levels in these
states, which the bank did not mention, are even worse.

The report said, “Poverty remains widespread. The
poverty rate in over half of Nigeria’s 36 states is
above the national average of 69 per cent.

“High poverty reflects rising unemployment, estimated at
23.1 per cent in 2018, up from 14.2 per cent in 2016.
Low skills limit opportunities for employment in the
formal economy.

“Government social programmes – N-Power and other youth
empowerment schemes – are meant to address
unemployment.”

According to the bank, Nigeria spent more than 50 per
cent of federally-collected revenues on debt servicing
in 2019.

On the performance of Nigeria’s economy in 2019, the
bank noted that agricultural sector suffered a setback
due to flooding and conflicts between herdsmen and
farmers.

It, however, reported that the country saw growth in the
transport, oil and Information and Communications
Technology sectors.

The report said, “Real Gross Domestic Product growth was
estimated at 2.3 per cent in 2019, marginally higher
than 1.9 per cent in 2018.

“Growth was mainly in transport, an improved oil sector
and Information and Communications Technology.
Agriculture was hurt by sporadic flooding and by
conflicts between herdsmen and local farmers.

“Manufacturing continues to suffer from a lack of
financing. Final household consumption was the key
driver of growth in 2019, reinforcing its 1.1 per cent
contribution to real GDP growth in 2018.

“The effort to lower inflation to the six to nine per
cent range faced structural and macroeconomic
constraints, including rising food prices and arrears
payments, resulting in a rate estimated at 11.3 per cent
for 2019.

“With fiscal revenues below seven per cent of the GDP,
increased public spending widened the deficit, financed
mainly by borrowing.

“At the end of June 2019, total public debt was $83.9bn,
14.6 per cent higher than the year before. That debt
represented 20.1 per cent of the GDP, up from 17.5 per
cent in 2018.

“Domestic public debt amounted to $56.7bn, external
public debt, $27.2bn. The share of bilateral debt in
total debt was estimated at 12.1 per cent and that of
Eurobonds at 40.8 per cent.

“High debt service payments, estimated at more than half
of federally-collected revenues, created fiscal risks.
The current account surplus sharply declined due to
increased imports, lower oil revenues and a smaller-
than-expected improvement in capital flows.”

The report said the Central Bank of Nigeria’s recent
‘decree’ that banks hold loan-deposit ratios of 60 per
cent boded well for increasing lending to the real
sector.

“Simultaneously, the retrenchment of government
borrowing and easing of the risks of lending to small
business could lower interest rates and unlock bank
lending to the private sector,” the report added.

It backed the increase in Value Added Tax, saying, “An
increase in the value-added tax from five per cent to
7.5 per cent to shore up domestic non-oil revenues is
welcome, though organised labour and businesses have
raised concerns of a potential rise in costs.”

It said the current account was projected to remain in
surplus in 2020, benefiting from improved oil revenues.

According to the report, Nigeria has many opportunities
to transform its economy, particularly in agro-
processing.

It added that special agro-processing zones could
promote agro-industrial development and employment.

However, insecurity could deter foreign investors,
shrivel the domestic economy, and ultimately dampen
prospects for economic growth, it said.

It added that high unemployment could create social
tensions, just as rising public debt and associated
funding costs could pose fiscal risks if proposed
adjustments were not implemented.

The bank said Nigeria’s oil exports could be affected by
developments in the Middle East.

Trade tensions between the United States and China could
weaken global growth and lower demand for Nigeria’s
products, including oil, it said.

The AfDB said prolonged closure of borders by Nigeria to
curb smuggling could affect trade with other countries
in West Africa and raise the prices of imported
products, especially rice.

These risks underscored the need to accelerate
structural reforms to promote economic diversification
and industrialisation to minimise vulnerability to
external shocks, the bank said.