Tue, Feb 21, 2012 - Page 6 News List

Oil wealth fueling poverty in Nigeria: analysts

‘RESOURCE CURSE’:Despite being Africa’s top oil producer and economic growth of more than 7 percent a year, 60 percent of Nigerians live on less than US$1 a day


A feckless political system and excessive reliance on an oil industry that generates few jobs have conspired to reverse Nigeria’s battle against poverty despite economic growth, analysts say.

Many see Nigeria as a classic victim of the “resource curse” where oil or mineral wealth leads to the neglect of other economic sectors, exposes the country to volatile price swings and fuels corruption and strife.

Nigeria is Africa’s top oil producer, but the number of Nigerians living on less than a US$1 a day rose to 61.2 percent in 2010 from 51.6 percent in 2004, the National Bureau of Statistics said in a report last week.

The figures marked a regression for Africa’s most populous nation — where the poverty rate had declined between 1996 and 2004 — and showed Nigeria has not shared in the progress made elsewhere on the continent.

“It remains a paradox ... that despite the fact that the Nigerian economy is growing, the proportion of Nigerians living in poverty is increasing every year,” said Yemi Kale, the head of the statistics bureau.

Nigeria’s economy grew at an average 7.6 percent between 2003 and 2010, according to the World Bank.

Analysts said that while the lucrative oil industry has fuelled growth since crude was discovered some 50 years ago, the sector’s dominance has been a curse for the poor, causing neglect in areas like agriculture.

“What we need is the opportunity for sectors involved with non-oil exports to provide jobs,” said Olufemi Deru, former head of the Lagos Chamber of Commerce, a key private sector grouping.

He said Nigeria has failed to come up with an effective agriculture policy.

“We should not be importing so much rice. This is a staple food for both the rich and the poor,” he said and suggested Nigeria restrict imports on basic foodstuffs to force a rise in agricultural production.

The United Nations Development Programme (UNDP) said in a 2010 report that, across Africa, extreme poverty declined from 1990 to 2008, but that progress was halted by the onset of the global economic crisis.

Some dispute those figures, and the UNDP has said its 2005 to 2008 assessments were based on projections, not hard data.

The African country that has clearly made the most progress is Rwanda — small both geographically and by population — where a powerful executive branch led by Rwandan President Paul Kagame is largely able to act unilaterally.

Poverty rates in the Great Lakes state, destroyed by the 1994 genocide, dropped from 57 percent in 2005 to 45 percent in 2010, roughly the period when Nigeria saw worsening poverty, according to government statistics.

“The problem is the structural differences in the Nigerian situation,” said Yemisi Ransome-Kuti, an activist and World Bank consultant on poverty reduction.

Governments in Nigeria’s 36 states have significant authority — which they often use for personal enrichment, not the public good — and can stymie initiatives that clash with regional political interests, Ransome-Kuti said.

Nigeria rarely sees policies through and tends to do a “somersault” when political obstacles crop up, according to Deru.

National leaders in a country widely regarded as one of the world’s most corrupt rarely generate sound policy, Ransome-Kuti said.

“They are not just lazy gluttons. They are incompetent. They don’t have the capacity to deliver,” she said of politicians in the capital, echoing recent comments by Nigerian Nobel Laureate Wole Soyinka.

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