21 April 2014

Nigeria: Global Coalition Against Poverty

With rising inequality as well as the increasing level of poverty across the globe, the need to continue to implement policies that would lift a greater number of the world population out of poverty has once more been highlighted at the International Monetary Fund (IMF)/Work Bank spring meetings

The annual meetings brings together central bankers, ministers of finance and development, private sector executives, civil society, and academics to discuss issues of global concern, including the world economic outlook, global financial stability, poverty eradication, jobs and growth, among others.

According to the President of the World Bank Group, Jim Yong Kim, income inequality is a disincentive to efforts at reducing extreme poverty globally. He expressed concern that a billion of the world's population live in extreme penury.

This huge population of those in the poverty bracket, Kim argued have made the attainment of the twin objectives of ending extreme poverty by 2030 and boosting shared prosperity a herculean task, saying that the recipe for bringing an end to poverty globally remains to make growth more inclusive and not merely focusing on economic growth.

To end extreme poverty, Kim said countries require what he described as a laser-like focus on making growth more inclusive and targeting more programmes to assist the poor directly, even as he suggested that vast number of the poorest would have to decrease by 50 million people annually by 2020.

For governments and policy makers in Nigeria whose recent GDP rebasing exercise saw it overtake South Africa as the continent's biggest economy, this is a wake up call especially as the country has been listed among the top five countries in terms of number of poor with seven per cent.

Despite robust growth outlook and an attractive investment outlook, Nigeria still suffers from gaping income inequality.

While thousands of new millionaires are created yearly, a greater fraction of the country's large population still live on less than $1 a day, as unemployment rate continues to rise.

To the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in order to reduce the poverty level in the country, there must be increased focus on job creation.

"We have to pursue growth in sectors that create jobs. That's why agriculture is enormous," she added.

On her part, the Managing Director of the IMF, Christine Lagarde urged global policymakers to overcome a trio of hurdles if the world economy is to successfully generate more rapid and sustainable growth. She stressed the need "for higher growth, better quality growth, more inclusive growth, and sustainable growth."

Furthermore, Lagarde called on policy markers in merging markets to strengthen macro and prudential policies to safeguard against market volatility and in low-income countries where growth remains strong, she called for vigilance. "Ambitious and coherent policies are required to avoid years of sub-par growth and to secure global financial stability.

"This means that all countries need to step up structural reforms-in labor markets as well as product and services markets-and well-targeted investment," Lagarde declared.

But the Chief Executive Officer of the National Competitiveness Council of Nigeria (NCCN), Mr. Chika Mordi believes that improving the level of competitiveness in Nigeria would have a positive impact on the economy, thereby lifting a lot of people out of poverty in the long-run.

"So, the number one challenge is to align the reality of Nigeria's competitiveness with the perception. The second dimension is to now actually improve the reality.

"There are challenges for any business operating in Nigeria or that seeks to operate in Nigeria. This ranges from things as basic as registering the business, getting a permit to build or get into a business, having access to cheap and ready finance, paying taxes, infrastructure, among others," he added.

However, a Senior Lecturer at the Lagos Business School, Dr. Doyin Salami described human capital development as a fundamental challenge.

He stressed the need to design policies that would develop knowledge, competence and creativity in the country.

"When you say there is growth, the challenge is how far it is percolating?" he wondered.

To the Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismark Rewane, there is need for Nigeria to pursue the attainment of the Millennium Development Goals and achieve international and domestic competitiveness.


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