Poverty: Too many trapped, any hope for the masses?

Poverty is a self-reinforcing trap, and because of this, rescuing people from its claws could be quite difficult. Sometimes the elite just never want the poor to rise, and many times the poor inadvertently frustrate good attempts at lifting them out of poverty, perhaps due to ignorance or passion for easier quick wins at the […]

Poverty is a self-reinforcing trap, and because of this, rescuing people from its claws could be quite difficult. Sometimes the elite just never want the poor to rise, and many times the poor inadvertently frustrate good attempts at lifting them out of poverty, perhaps due to ignorance or passion for easier quick wins at the expense of sustainable wealth creation.

These explain the reason it takes extraordinary commitment for anti-poverty policies to succeed. This is the case with Nigeria, where after more than seven years of wishful promise to break the poverty jinx, the current administration has found it tough to even scratch poverty, which it boasts to fight. The government promised when it came into power that it would take 100 million Nigerians out of poverty over 10 years. More than halfway into that timeline, the scorecard suggests neither any realism nor hope.

Two eminent scholars, Paul Collier and Jeffrey D. Sachs, are the proponents of the poverty-as-trap theory, a framing that aptly portrays the power behind this social malaise called poverty. This imagery evokes the hopelessness of an animal caught in a trap in the bush. For those familiar with this phenomenon, they can feel the emotions of the unfortunate animal, while still alive – staring at the trap helplessly and hopelessly. Although in a few cases some animals escape from the trap, it is a fact that most wait in that hopelessness until the trap owner comes to finish them off or they die of blood loss or other factors. That is why sometimes the poor can be seen as the living dead.

For Collier, the power of poverty lies in these traps:  conflict trap; natural resources trap, the trap of being landlocked with bad neighbours, and bad governance in a small country. For Sachs, these traps are diseases, physical isolation, climate stress, environmental degradation, and by extreme poverty itself.

Framing poverty as a trap should assist policymakers to understand and appreciate the enormity of the challenge they face in the fight against this problem. It should aid in the design and implementation of anti-poverty programmes that have the chance of making impact on the poor.   Generally, efforts that have been directed at this problem have failed largely because the relevant traps holding the target groups have either not been identified or have been neglected in the process.

An example of the above fact is contained in a report by the World Bank in March this year, tagged: “Nigeria Poverty Assessment 2022: A Better Future for All Nigerians”.

The bank in that report observed that poverty in Nigeria is an in-work phenomenon. It noted, for instance, that the share of people working—as per the 2018/19 Nigerian Living Standards Survey —it did not differ significantly across different deciles of the consumption distribution, adding that around 67.7 per cent of working-age Nigerians from the bottom 40 per cent of the consumption distribution were working in 2018/19, compared to 69.6 per cent of working-age Nigerians from the top 60 per cent.

“This indicates that most poverty in Nigeria is in-work poverty and that working in just any job does not guarantee a pathway out of poverty,” the Bank noted.

The bank blamed this on the fact that structural transformation has yet to advance significantly in Nigeria, while agricultural jobs are disproportionately concentrated among the poor. It said that about 11.7 per cent of Nigerian workers were primarily engaged in jobs in industry within the period covered by the study, compared to 42.4 per cent in agriculture and 45.9 per cent in services (including retail and trade and other types of services.

The Bretton Woods institution further said that lack of progress on structural transformation is partly due to Nigeria’s continued dependence on oil revenues—which have made up more than 80 per cent of exports since the 1970s—and constraints on trade that limit export-led growth.

The implication of this observation is that part of the trap holding people in poverty in Nigeria is the structure of the economy, with its heavy reliance on the oil industry. A common feature of this industry is its exclusivity, which implies that it is designed, for whatever reason, to cater to the interest of just a few- the cartel that has been in charge of it.

The other side of this ugly story is that efforts to diversify the economy away from this oil dependency have been cosmetic, devoid of the commitment of a rescue mission. If it were not so, Nigeria’s agriculture would not, at this point in time, still remain the enclave of poor villagers struggling to feed themselves. 

The poverty-as-trap frame should, therefore provide an explanation for the glaring failure of successive poverty-reduction programmes that have been initiated by different administrations in the country. Some have entailed throwing money at people, even traders in the markets (remember Traders Moni), other phantom cash transfer schemes that lacked definite descriptions and methodology, except the reports on how many people have benefited from such exercises, etc. Their impact is usually short-lived, as they are destined to fail, not able to address the relevant traps holding such recipients.

Think about it. Fighting poverty is not about giving people handouts to feed today, which most of the so-called poverty-eradication programmes of the government have entailed. Of what benefit is a N20,000 loan or transfer to a trader selling in a given market, when the future of that market is not assured? Some loan beneficiaries would still be thanking their benefactors when the demolition of their market stalls is starting. In that case, what happens to the business and the loan or cash transfer? Without the structural impediments prevalent in the economy being addressed, a lot of these efforts end up achieving little or nothing, while poverty multiplies.

If we expect to see a significant result in the fight against poverty, the issue of bad governance, identified by Sachs as a poverty trap must be addressed. Among all others, it is the most powerful factor responsible for the prevalence of poverty. It is bad governance that leads to wrong or ineffective policies being designed and implemented. It is bad governance that sustains the diversion of resources from those who need them most.

In its June, 2022, edition of Nigeria Development Update, the bank said that by the end of 2022, seven million more Nigerians are expected to fall into poverty due to the “inflation shock”.  That number is made up of six million Nigerians who, according to the bank, were earlier projected to fall into poverty by inflation this year. The additional million will be pushed into poverty by the Russia-Ukraine war, which has escalated the inflationary pressure in the country. These additions will take Nigeria’s poverty level to 89.9 million, according to the bank. So, how many have been lifted from poverty?