It is Peter Drucker- the management guru, that is often quoted to have said: “you can’t manage what you can’t measure.” But I wish to follow up with an addition that is as relevant and critical, which is: “if you can’t measure it, you can’t improve it”. These quotes are important premises for this discourse.
On Thursday 17 November, 2022, the Federal Government of Nigeria launched a new tool for measuring poverty in Nigeria, which found that 63% of people – 133 million Nigerians out of an estimated population of 211 million – are multidimensionally poor. This new tool: Multidimensional Poverty Index (MPI), has been deployed in over 100 countries and defines poverty as the overlapping combination of deprivations that people can face in several areas of their lives. This is markedly different from the narrow focus on only monetary poverty measurement.
In fact, it is not only the hitherto narrow focus on monetary poverty measurement that the MPI has exposed, it has also exposed how largely unaccountable subnational governments have been in the management of public finance. What have been the contributions of state and local governments to poverty alleviation? It is patently unfair to leave the federal government alone to take on the task of poverty alleviation in the country.
For instance, if you want to invest in agriculture, you need land and this land belongs to the states. Unfortunately, the states are not investing in their rural areas. They spend money in urban areas, borrowing, for instance, to build airports and other unnecessary projects, and competing with one another in constructing flyovers in their capitals. These funds should have been invested on building solid rural roads, especially in the agro-corridors to cut down on post-harvest losses currently put at 60 percent of total yields. Enhancing the food supply chain from rural to urban areas will ensure food availability and security as well as help to address the problem of inflation.
It is important to note that while the recently launched Nigeria Multidimensional Poverty Index- MPI (2022) provides a new perspective on poverty, it complements rather than replaces monetary poverty data. Likewise, it does not measure the same households in its sample as Nigeria’s monetary poverty line, but through its 15 indicators grouped under four dimensions of health, education, living standards, and work and shocks, it sheds further light on the lived experience and nature of poverty for Nigerian households.
Monetary versus MPI, which is better?
While their results differ, both provide a holistic insight into the poverty status of the country.
The proportion of the estimated 211 population in Nigeria who are multidimensionally poor is higher at 63% (133 million) than the proportion of the population (40.1%) living below Nigeria’s poverty line of Naira 137,430 per person per year, based on the 2018/19 Nigeria Living Standards Survey (NLSS), by the National Bureau of Statistics (NBS). Notwithstanding the 2018 lower monetary poverty figures, monetary poverty status of Nigeria remains lower as of today. Based on the World Data Lab poverty model, with a poverty threshold of $1.90, the World Poverty Clock calculates that in Nigeria, people living in extreme poverty in monetary terms are 69.9million; that is, 32% of the estimate ed population of 215 million used for its projections.
These figures are important to highlight in the first place in order to lay the foundation for the facts stated below:
Nigeria is NOT the poverty capital of the world- not in multidimensional terms or in monetary values. According to the World Bank, currently, the top 10 countries with the highest monetary poverty rates in the world are: South Sudan – 82.30%; Equatorial Guinea – 76.80%; Madagascar – 70.70%; Guinea-Bissau – 69.30%; Eritrea – 69.00%; Sao Tome and Principe – 66.70%; Burundi – 64.90%; Democratic Republic of the Congo – 63.90%; Central African Republic – 62.00%; and Guatemala – 59.30%.
Meanwhile, according to the Global MPI conducted in 111 countries and released in September 2022 by UNDP and the Oxford Poverty Human Development Initiative (OPHI), India has by far the largest number of poor people worldwide at 22.8 crore. The global MPI is an internationally comparable index computed by OPHI and the UNDP on multidimensional poverty, using data available across the 100+ countries being studied.
The Nigeria Multidimensional Poverty Index- MPI (2022) was conducted in the 109 Senatorial districts across the 36 states, including the Federal Capital Territory (FCT). As detailed in the report, the highest contributor to the 133 million poor people is from those living in rural areas; that is, within local government areas and at ward levels. The result breakdown shows nationally that 132.92 approximately 133 million persons are poor; rural areas contribute a total of 105.98 million to this figure; with urban areas contributing 26.94 million. These rural areas contributing the most to the country’s poverty status are outside of the federal government’s obligations but sit squarely within the jurisdiction and legal responsibilities of sub-national government, that is, state governors and local government chairmen and councilors. The surveys conducted were at Primary Healthcare Centres (PHCs) for the MPI Health dimension; and in primary schools- for the education dimension. PHCs and primary schools are the responsibilities of the sub-national government.
The federal government has now with the deployment of the MPI measurement tool and these findings placed in the hands of state governors, LGA councilors, the Legislature, Private sector, and other key stakeholders, a policy tool to help address the overlapping, multi-sectoral deprivations that people face. It is only when the sub-national government collaborates with the federal and adopt this data-driven and evidence-based approach to governance that we can truly and positively change the trajectory of poverty in our country.
President Muhammadu Buhari remains unwavering in his commitment at eradicating extreme poverty in all its forms; hence, beyond the deployment of the MPI survey, the federal government has begun using the results as a policy tool. The 2023 budgeting process aligned resource allocations with the findings of the Nigeria MPI (2022) results. Dimensions with highest contribution to deprivations were prioritised in the 2023 budget: security, education, health, infrastructure and related social development and poverty-reduction activities. These sectors identified as “dimensions” in the MPI, are the top five priority sectors in the 2023 national budget, accounting for N8.074 trillion of the total N20.5 trillion national budget.
The MPI is not just a measurement tool, but one that helps with behavioural and perception change. Nigerians need to understand that because an individual earns a daily income above $1.90, that is, NGN850, that this does not automatically mean the individual is not poor. This is the crux of the perception change that the MPI brings to fore and seeks to change. For example, in Bayelsa- currently the second poorest state after Sokoto, the proportion of multidimensionally poor children under 5 is above 50% in all States but greater than 95% in Bayelsa. This means that even though, a household may earn above the daily income of NGN850 or NGN135,415 per annum per capita, if a child within this household is deprived in child indicators such as in nutrition, school attendance, child engagement and across the 15 MPI indicators, such household and child are identified as multidimensionally poor.
This new understanding of poverty beckons on ordinary Nigerians to demand for accountability in government, especially at sub-national levels where poverty is most prevalent. This kind of attitudinal change also requires changes in the choice architecture of who we vote into elective positions. When social and economic investment decisions are not based on data evidence such as the MPI provides, we will continue to perpetuate the circle of poverty, given the current approach where state governors continue to invest and compete in borrowings to build monuments like airports and flyovers even when data provide evidence to the contrary. Rather, resources should be channeled towards lowering the deprivations in the health sector, for instance, by investing in the State Health Insurance Scheme to enable for inclusive health coverage or investing in the efficiency and effectiveness of primary health care centres (PHCs) of which barely 20% of the 30,000 in the country was functional.
The results are quite revealing, and it reiterates the call for judgment in choosing the right leadership especially when one considers the poverty dynamics between the current ruling party’s (APC) States versus those of the major opposition party (PDP). It is significant to highlight that, for instance, Kano and Kogi- northern APC governed states, are the least poor in the North. Recall that 65%, that is 86 million of the 133 million Nigerians that are MPI poor, are from the North. Meanwhile even though the South-West contributes the lowest number of MPI poor, that is, 16.27 million persons, Oyo state- a PDP ruled state is one of the poorest in the region. The two states with the lowest deprivations across all the dimensions are Lagos (29.4%) and Ondo (the least poor nationally; 27.2%), are APC governed states. In Oyo state, about a half of its 7.8 million (48.7%) population are MPI poor. In terms of the interlinkages between poverty and natural resources, it is troubling to note that in spite being an oil producing state and one of the top 5 states with the highest FAAC allocations, Bayelsa, a PDP State with less than 3 million people is the second poorest state in the federation; much worse off than Kano (21st in poverty ranking), which has a population of approximately 16 million persons.
Poverty in Nigeria traditionally has been measured using the monetary approach. This approach analyses the consumption and expenditure of a household to estimate their living standards. The last Monetary Poverty estimate as reported by the National Bureau of Statistics, was 40.1 percent for 2019, pre-Covid. The 2022 Multidimensional Poverty Index Survey results as published by the same agency uses a completely different method in assessing the poverty status of an individual or household. Unlike the monetary measurement, it uses deprivations in basic amenities as a means of assessing poverty. Globally, where both measures have been used, the multidimensional measure more often records a higher level since it considers a range of issues in arriving at a conclusion of a person’s living standard. As clearly stated in the 2022 Multidimensional Poverty Index Survey report published by the National Bureau of Statistics, this survey is the first standalone MPI Survey to be conducted in Nigeria with this level of disaggregation. It also indicates that poverty is predominantly a rural phenomenon, particularly when considering the dimensions driving poverty in each state, which vary from state to state. This survey exercise was commissioned with the intent of using it as a diagnostic and policy-making tool to address issues of poverty, as it clearly spells out the areas, which government at all levels can work on to improve the living standards of citizens.
An intrinsic value of the multidimensional poverty measurement is the localisation of the incidence and intensity of poverty. The 2022 Nigeria MPI survey findings are a direct reflection of the failure of local and State governments to provide opportunities for citizens to participate in economic activities, and basic social amenities that are within the remits of states and local governments.
Given the above, the idea, therefore, that the Federal government has thrown 133m people into poverty after committing to lift 100m people out of poverty in 10 years, is false and misleading. Nonetheless, the federal government remains unflinching in its efforts to address the root causes of the multiple deprivations Nigerians face especially at sub-national levels and will continue to expand its social protection and poverty reduction strategies into states, to deliver on its commitment to lift millions out of extreme poverty.
Prince Clem Ikanade Agba is Minister of State for Finance, Budget and National Planning and supervises the National Bureau of Statistics (NBS).