Nigeria record increase in poverty rate in 2017-World Bank
Despite Nigeria’s celebrated exit from economic recession in 2017, the World Bank Group reveals that the country’s poverty and unemployment rates rose during the period.
The bank, in its ‘Nigeria Bi-annual Economic Update,’ reports that the rates of unemployment and underemployment increased in 2017 and poverty is estimated to have increased slightly.
The report explained that Nigeria’s Gross Domestic Product growth reached 0.8 percent, driven by an expansion in oil output and continued steady growth in agriculture.
The World Bank said, “The decline in the non-oil, non-agriculture sector, however, continued, as aggregate demand remained weak and private sector credit low.
“The rates of unemployment and underemployment increased in 2017 and poverty is estimated to have increased slightly. Gross Domestic Product growth in 2018 is expected to hover just over two per cent, largely oil sector-driven.
“Nigeria has a big home market, which is constrained by limited connective infrastructure, thereby reducing producers and firms’ ability to reach wider markets.”
It added, “This lack of connectivity dampens economic collaboration and cooperation among the country’s regions, limiting market integration and reducing producers and firms’ ability to reach wider markets.
“Spatial fragmentation and limited connections also hurt welfare and prospects for poverty reduction.”
A statement issued by the World Bank in Abuja, reports the Global Lead, Territorial Development of the bank, Somik Lall, as saying that spatial integration and sub-national specialization were key to creating a nationally-integrated market for goods and services.
Lall believes that the move will also attract the much-needed private investments, which in turn could enhance productivity through scale and specialization.
According to the World Bank, Nigeria will benefit from policies to promote spatial integration and sub-national specialization, which will stimulate diversified and long-term growth.
This can be achieved through market specialization and differentiated positioning strategies for industrial clusters across the country, according to the report.
The bank said the key challenge for policymakers at the federal and state levels was to identify interventions (policy, regulatory, institutional and investment, etc.) that were best suited to realise development potential of sub national regions and integrate domestic markets.
For Nigeria to tap its spatial drivers of development, policymakers may want to focus on investments that reinforce clusters and economies of scale and optimise the connectivity between rural areas and the major urban markets, the bank said.
Policymakers were therefore urged to address structural and land management issues in major urban nodes and along major growth corridors in other to alleviate barriers that undermine the growth potential.