The distressing state of Nigeria’s economy was brought to the fore at the weekend when Aliko Dangote, president, Dangote Group, said more than 100 million out of a population of 187 million Nigerians were wallowing in poverty.
Dangote told participants at the Executive Course No. 38, 2016 at the National Institute for Policy and Strategic Studies (NIPPS), Kuru, neaar Jos, Plateau State, that the situation was unacceptable to him given Nigeria’s abundant resources.
Delivering a paper on ‘Promotion of Local Manufacturing and Poverty Reduction In Nigeria: The Private Sector Experience and Policy Options,’ the entrepreneur said: “It is a curious paradox that Nigeria, Africa’s largest oil producer, and the largest economy on the continent, also has one of the highest levels of poverty. It is estimated that more than 100 million out of a population of 187 million Nigerians, live below the poverty line.”
Quoting a United Nations (UN) report, Dangote said youth unemployment rose to 42 percent in 2016 with many graduates combing the streets in major cities such as Lagos, Kano, Abuja and Port Harcourt in search of often-elusive white-collar jobs, while for some who were employed, their situation could best be described as that of under-employment, as they were underutilised and poorly paid.
This development, posited, no doubt, has serious security implications, as evidenced by the high rate of social ills plaguing the nation. “The spate of kidnappings, intermittent vandalism of petroleum pipelines in the Niger Delta, and the protracted insurgency in the North East, are all fuelled, to a large extent, by the high level of endemic poverty in the country.”
Dangote pointed out that the current economic recession has further worsened the situation, as the Government continues to record dwindling revenues thus making it increasingly difficult for the Government to fulfil some of its obligations to the people.
“Coupled with this, the activities of insurgents in the North East, have also affected the level of poverty in that part of the country. It is estimated that there are over 2.4 million Internally Displaced Persons (IDPs), in the region. It will take billions of Naira to rebuild the North East and fully re-settle victims of the insurgency. For a Government that is severely constrained in terms of funds, this, no doubt, is a daunting challenge.”
Dangote noted that Nigeria’s large population offered incentives for manufacturers and service providers. “Nigeria also has abundant natural resources. All these make Nigeria a country that offers one of the highest returns on investment in the world, which is attractive to investors.
“The high volume of Foreign Direct Investment (FDI) that has been flowing into Nigeria in recent years, attests to this fact. South African companies such as MTN Nigeria, Shoprite and MultiChoice, have taken advantage of our huge population to do business with us and they are today, reaping the dividends,” he said.
Explaining the sad state of affairs has been staring the nation in the face for a while, he attributed the poverty most Nigerians face as a direct consequence of long enshrined inequitable distribution of the nation’s wealth, failure to diversify the economy away from oil, which is the country’s major revenue earner, and widespread corruption that affects efficient allocation of available resources,
Dangote, who has advocated the disposal of unprofitable national assets to cushion the effect of the current recession identified other factors that fuel the scourge of poverty to include lack of commitment to the success of various poverty reduction programs, inaccessibility to funds, and poor state of infrastructure in the country, particularly, electricity. However, the situation is not insurmountable if we muster the necessary political will to correct these anomalies.
Said he: Today, Nigeria is currently facing economic recession occasioned by fall in global oil prices. Militant activities in the Niger Delta, which have reduced oil production by a third, and the increasingly weak national currency, the Naira, have also affected the economy drastically.
“High food and fuel prices, a squeeze on foreign aid, and falling Diaspora remittances have also worsened our precarious economic situation. Distinguished participants, we do need to think out of the box, to get out of the woods.”
However, to move out of the current economic quagmire fast, Dangote canvassed for the removal by government, some of the barriers that hinder the growth of the non-oil sector.
One of the ways according to him is for the Government to create an enabling environment that will encourage both local and foreign investors to set up businesses by granting tax holidays, improving the state of infrastructure in the country, and providing more access to credit facilities.
“The Central Bank of Nigeria (CBN) should also step up its interventions in the area of improving funding for small and medium scale enterprises (SMEs). All these will create jobs and raise the standard of living of the people.
Dangote explained that unemployment arose basically because job opportunities were not being created fast enough to match the ever-increasing work force attributing this to the effects of many years of de-industrialisation in the country. “Retrenchment both in the public service and the private sector also continue to exacerbate the unemployment crises.”
Further advising on the way out of recession, Dangote recalled his days as the Chairman of the National Committee on Job Creation, which was set up in 2010 to address the unemployment situation in Nigeria, saying together with his committee members, they identified to identify priority areas for job creation.
“Some of these areas include micro, small and medium scale enterprises (MSMEs), agriculture and agro-allied industries, manufacturing, entertainment and vocational skills. I believe we can create new opportunities for MSMEs by linking them up with larger enterprises, through industry clusters.
“Since a large number of employers in the MSMEs sector are informal family-owned businesses, they can be trained to become more proficient through various capacity building initiatives,” he stated.