…. Poverty rate to crash as reforms deepen –W’Bank
…Economy harbouring too many parasites –Experts
By Uche Usim
Poverty and staggering debt remain the albatross on the shoulders of the federal government, 36 States and the Federal Capital Territory (FCT) and the 774 Local Government Areas, despite sharing a whopping N17.9 trillion as the cumulative Federal Account Allocation Committee (FAAC) revenue under President Bola Tinubu.
The figure, which is the highest by the Nigerian government in history, represents a 42.6 per cent surge when compared to N12.56 trillion it was a year earlier.
The increase sprang from the removal of petrol subsidy which freed more funds for monthly FAAC payouts.
The revelation came from a recent FAAC report released by the National Bureau of Statistics (NBS).
Widening poverty
Regardless of the higher monthly subvention, a report from the World Bank indicates that Nigeria’s poverty rate rose from 40 percent in 2018 to 46 percent in December 2023. It means that the number of poor people increased from 79 million to 104 million.
According to the report, more people have fallen below the poverty line due to sluggish economic growth and rising stubborn inflation.
“Sluggish growth and rising inflation have increased the poverty rate from 40 percent in 2018 to 46 percent in 2023, pushing an additional 24 million people below the national poverty line,” the World Bank said.
The report added that the number of poor people in urban areas (more exposed to inflation) increased from 13 million to 20 million, while the number of poor people in rural areas rose to 84 million from 67 million within the same period.
The worst five states in poverty headcount rate for 2019, according to Statista are; Sokoto, 87.73%, Taraba, 87.72%, Jigawa, 97.02, Ebonyi, 79.76% and Adamawa, 75.41%
The lowest five states are; Lagos, 4.5%, Delta, 6%, Osun 8.5%, Ogun 9.3% and Oyo, 9.8%
Analysts say the figures have not improved because the factors responsible for the worsening poverty, like terrorism, climate change crisis, lack of farm input, inflation and others, are yet to abate.
The World Bank, however, predicted a silver lining, explaining that the increase in poverty rate will be undone by the recent reforms of President Bola Tinubu from 2024 onward, reversing the rise to 44 percent in 2026.
High sovereign debt
Figures from the Debt Management Office (DMO) show that Nigeria’s total public debt stock as of December 31, 2023, was N97. 34 trillion or $108.229 billion.
Sub-national domestic debt stood at N5.863 trillion, while external debt stock was $4.61 billion.
Topping the debtor list is Lagos State, Nigeria’s commercial hub, had an external debt of $1.24 billion in 2023. However, this figure is slightly less than the $1.25 billion in 2022. The slight decline is likely due to a dependance on more domestic debt, which is about N1.05 trillion. Following closely is Kaduna State, which has an external debt of $587.07 million in 2023, climbing from $573.74 million in the previous year. Also exposed to offshore lenders is Edo State with external debt jumping to $314.45 million in 2023 from $261.15 million in 2022.
Highest and lowest FAAC receivers
An analysis by the whistler shows that Delta, Rivers, Akwa-Ibom, Bayelsa, Lagos and Kano states got the highest FAAC allocation under Tinubu.
On the flip side, Gombe, Ekiti, Ogun and Cross-River States for the lowest.
Despite the fatter monthly FAAC income, there are genuine concerns as 15 Nigerian states have yet to implement the N30,000 minimum wage for their workers since it was signed into law in 2019.
Considering the humongous funds available to states, the organized labour is insisting on a monthly minimum wage of about N600,000 as millions of Nigerians battle multi-dimensional poverty.
According to BudgiT, even though 15 states are yet to implement the minimum wage of N30,000, the 36 states of the federation grew their cumulative personnel cost by 13.44 per cent to N1.75 trillion in 2022 from N1.54 trillion in 2021.
Also, these states grew their overhead bills by 23.42 per cent to N1.24 trillion in 2022.
Under the current administration Delta, Rivers, Akwa-Ibom, Bayelsa, Lagos and Kano states got the highest FAAC revenue during the period.
However, at the end of the 10 months of February 2023 under former President Buhari, Delta, Akwa-Ibom, Rivers, Bayelsa, Lagos and Kano states received the highest revenue.
Further breakdown showed that Delta state despite being the state with the most allocation in both periods, saw a decline of 3.77 per cent to N326.64 billion as against N339.44 billion it got under Buhari.
Rivers, which is the second state with the highest allocation under Tinubu, dropped by 0.88 per cent to N261.48 billion against the N263.79 billion which it got under Buhari.
Experts preach frugality
Experts have pushed for more frugal management of resources across the three tiers of government so that the gains of good governance can cascade down to all nooks and crannies of the society.
The Director General, Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf, said it was disheartening that development at the sub-national level has remained appalling, calling on governors to look beyond the state capital to develop the rural areas where the bulk of the citizens reside.
He said: “It’s not nice that poverty has continued to ravage the citizens despite higher FAAC disbursements.
“The additional revenue should be spent on projects that positively impact the lives of the people.
“It’s not about governors building flyovers at state capitals and neglecting many parts of their states.
“Look at what your citizens are predominantly engaged in. Are they farmers, fishermen, traders and so on? You invest in what they do so you make the state more inclusive, not just building airports, flyovers etc.
“Corruption is a major issue actually. The more money available, the more the corruption component of it.
“People should be made accountable. A system carrying too many parasites cannot grow.
The citizens should demand accountability and not just lament and go to bed after voting”, he said.
