By AFEFELOWO HABEEB BABATUNDE
1.UNEMPLOYMENT
Unemployment is a major factor contributing to poverty in Nigeria.
There is a strong correlation between unemployment and poverty. When people are unemployed, their source of livelihood depletes over time. The cost of living becomes high and the standard of living goes down. There are many people in Nigeria who lack the opportunity of being employed. The formal unemployment rate in Nigeria as estimated by the World Bank in 2007 was 4.9 percent and Nigeria ranked 61st across the worlds countries (CIA Factbook).
As reported by Teshome (2008), the then newly released African Development Indicators report of the World Bank showed that “education, once seen as the surest, undisputed gateway to employment, no longer looks so certain.”
This is very true in the case of Nigeria. The fact that you are an educated Nigerian is no guarantee that you will be employed. Furthermore, according to the World Bank report, unemployment in Africa is higher among those who have attained a higher education of some kind, and also those in wealthy households because they depend solely on the wealth of their families and do not consider employment a priority.
Many graduates in Nigeria wander the streets without anything reasonable to do for a living. The government is capable but unwilling to provide jobs for them. Employment in Nigeria is usually not based on merit but depends on how connected you are with people that have power. This leaves many highly qualified people in poverty as seemingly no one cares to know what they are capable of achieving. These people are missing out on the income they would have gotten if they were employed. The number of quality jobs in the economy is low and many government resources are misallocated.
Unemployment-induced poverty tends to increase the crime rate and violence in the country. Most unemployed youths resort to crimes such as armed robbery, kidnapping for ransom, internet fraud and other forms of fraudulent activities. The reservation wage they get from these activities is typically barely enough to take care of their basic necessities.
2. CORRUPTIONS
Transparency International defines corruption as “the abuse of entrusted power for private gain.
This has become a common act in Nigeria and it has destabilized the political system drastically. Government funds are being misappropriated on a daily basis by the leaders, who only put the interest of their family and friends at heart while ignoring the masses. The corruption has eaten so deeply into the government and economy that everyone seems to be blinded by it. Corruption has almost become an accepted way of life in Nigeria.
In Nigeria, the government’s income is generated mostly from natural resource revenues. This income, instead of being used for developmental purposes, is then circulated among the political office holders and their families, leaving the rest of the people to wallow in poverty. Political leaders practically ignore the affairs and wellbeing of their people who elected them into office. They mismanage and embezzle funds. There are several issues involved with bad governance in Nigeria, use of wrong policies, adaptation to wrong policies and implementation of those wrong policies. In any case, it is clear that Nigeria’s corruption has increased poverty and inequality as well as contributed to high crime rates.
3. NON-DIVERSIFICATION OF THE ECONOMY – OIL OVER-DEPENDENCY
While Nigeria’s poverty has been identified to be caused by many factors, Nigeria’s non- diversification of the economy can be seen as a major factor. Before 1970, the Nigerian economy was driven by the agricultural sector. The oil sector which only constituted 1 percent of the country’s export revenue in 1958 rose to 97 percent by 1984 and has since then not gone below 90 percent. In 2008, the oil and gas sector constituted about 97.5 percent of their export revenues, 81 percent of government revenues and about 17 percent of GDP.7
In Nigeria, those in power have practically ignored other sources of income, and today, Nigeria depends heavily on exporting oil. This dependency on natural resources is often referred to as “Dutch disease”, whereby natural resources make a country less competitive. Excluding the few working in the oil sector, the majority of the people have been impoverished as their products have become irrelevant. The agricultural sector, which was their major means of income before the discovery of oil, is considered almost useless.
Beyond the Dutch disease, Nigeria’s abundance of a natural resource has led to what is known as a resource course, which is reflected in the “Niger Delta Crisis (reflecting the region of the country where most of the oil is coming from). The people in this region are fighting for resource control as they claim the government is not fulfilling their promise of giving them the large part of the oil revenues.
The wealth from natural resources in Nigeria is supposed to be working with the derivation policy, but this policy is not functional in any way, as the oil-producing states are still impoverished and this policy is supposed to work in a way such that these states with these natural resources should be able to get a large part of the countries revenue as they contribute a lot to the national wealth.
According to Collier (2007), resource wealth sometimes contributes to a conflict trap and the surplus from natural resource exports reduces growth. He goes on to discuss the case of Nigeria in the 1970s, when other exports of the country like agriculture became non- profitable due to increase oil revenues. He explains how the Dutch disease can damage the growth process by closing out on the exports in other promising sectors of the economy. The first half of the 1980s gave rise to a huge oil boom in Nigeria and also led to excessive government borrowing and investment on wasteful projects that made the corruption in the country more apparent. As the world price of oil crashed in 1986, Nigeria’s oil revenues reduced drastically and Nigeria’s external debt increased drastically. The introduction of the structural adjustment program (SAP) was one of the government reforms advocated by the international financial institutions to reduce Nigeria’s oil dependency.
4. INEQUALITY
Inequality implies a concentration of a distribution, whether one is considering income, consumption or some other welfare indicators or attributes. There was an increase in income disparity after the economic growth which Nigeria experienced between1965-1975, and this income inequality has increased the dimension of poverty in the country.
The income inequality between the people in rural and urban areas in Nigeria is remarkably high, as those who live in the rural areas base all their income on agriculture which is today not a thriving sector in Nigeria as oil has taken over the economy. They do not invest their money to acquire skills as people in the urban areas would and this makes them more vulnerable to poverty and leads to some social and economic problems such as violence, corruption and so on
5. LAZINESS
Laziness is a common disease which is virtually suffered by many Nigerians today, especially those from wealthy households. Everyone wants to be comfortable but they are not ready to work towards it.
This often leads to greed where people will do whatever they can to keep the family wealth for themselves. In most families, everyone depends on the bread winner, who works so much to keep the family going and when he dies the family is likely to become poor because of mismanagement of funds. In most Nigerian families, the death of the bread winner means the death of the whole family fortunes; because everyone was depending on him/her to provide everything.
6. POOR EDUCATION SYSTEM
Education can play a major role in reducing poverty. According to the World Bank, education is central to development. It promotes economic growth, national productivity and innovation, and values of democracy and social cohesion. In Nigeria, the population with no education account for most of the poor.
The education system in Nigeria can be regarded as a failure compared to other countries in the world. The United Nations Universal Declaration of Human Rights8 states that “everyone has the right to an education.” This right to education has been denied to many Nigerians, of which many of them can be considered invisible to the society now. This deprivation of education applies more to females than males, because they are considered the inferior sex. Hence educating them is seen as unnecessary as they are expected to marry as early as possible.
V. CONCLUSION
Poverty is multi-dimensional and even though it is difficult to separate the various dimensions of poverty from the various causes of poverty, in the case of Nigeria, we have shown that unemployment, corruption, the non-diversification of Nigeria’s economy, inequality, laziness, and a poor education system are some of the key determinants of poverty.
These determinants are many times related to each other and also enforce each other. For example, unemployment, poor education and poverty can be seen as vicious cycle. Today, people who are not educated lack the opportunity of being hired for good jobs, and the poor masses today still cannot afford to go to school which makes them the poor unemployed masses tomorrow. Hence, all these factors are correlated and must all be tackled together if any progress wants to be made.
Being educated does not necessarily mean you will be employed. Many people graduate from school and stay for years without a job. This is partly due to a lack of employment opportunities as well as corruption. Many offices hire solely by preference, not by merit. Preferential treatments have become the order of the day, and this increases the number of unemployed graduates. Nigeria needs to do more for the employment of young graduates, which will also help in reducing crime rates, as many youths resort to crime for survival.
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