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Growing rate of poverty and FG’s injection of N381 trillion into the economy

Growing rate of poverty and FG’s injection of N381 trillion into the economy
December 15
18:33 2021

BY JEROME-MARIO UTOMI

It qualifies as exemplary and a right step taken in the right direction, the recent report by the director-general of the Fund, Joseph Ari, that the federal government is partnering with the Industrial Training Fund (ITF) to inject N381 trillion into the economy to cushion the growing rate of poverty, job losses and economic degradation in Nigeria.

Ari, during a media interaction with the correspondent chapel of the Nigeria Union of Journalists in Jos, stated at the Plateau state capital that the federal government came up with a five-year national development plan tied around the sum of money to be able to achieve this aim. According to him: “The plan, which projects the creation of 21 million jobs, with 35 million Nigerians lifted out of poverty, affordable housing for Nigerians and an export-led economy among others, is expected to cost N381 trillion to implement and have six focal areas of economic growth and development, infrastructure, public administration, human capital development, social development, and regional development”. He said the plan will replace the initial economic recovery and growth plan (EGRP).

Undoubtedly, it should not be difficult to recognise what makes this latest decision by the federal government a good one.

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Fundamentally going by the labour statistics report from the National Bureau of Statistics (NBS) published in Q2 2020, it reveals that Nigeria’s second-quarter unemployment rate among young people (15-34 years old) was 34.9%, up from 29.7%, while the rate of underemployment for the same age group rose to 28.2% from 25.7% in Q3 2018. These rates were the highest when compared to other age groupings. Nigeria’s youth population eligible to work is about 40 million out of which only 14.7 million are fully employed and another 11.2 million are unemployed.

However, despite the validity of the FG’s present move, it appears to the watching world that the leadership of the country like their counterparts in other African countries, continue to apply methods and frameworks that are obsolete.

There is a greater devotion by the federal government and states to dish out money to citizens in the name of cushioning the harsh economic effects in the country. This practice happens periodically even when the world is in agreement that it is not right for state and federal governments to create agencies that dole out money to Nigerian youths with the aim of eradicating poverty. Such huge resources do not have economic value.

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Instead, such amount should be used to build industries and factories of production, they added that considering the slow-growing economy but scary unemployment levels in the country, the current administration will continue to find itself faced with difficulty accelerating the economic life cycle of the nation until they contemplate industrialisation or productive collaboration with private organisations that have surplus capital to create employment.

Others are of the view that to solve the nation’s economic problems, particularly unemployment, less emphasis should be placed on university education. Technical and commercial colleges should be established and funded to produce graduates that are technically fit. The state, they argued, should engage in owning business and manufacturing outfits like what was done in the 1970s-1990s in Nigeria. Companies and factories wholly owned by state governments under a new management system should be built to absorb graduates and skilled workers. It is still possible to operate profitable businesses by the state government using the Indian/Lebanese system of business model.

Independent auditors should be hired to check their books, they concluded.

To the rest, corporate organisations and entrepreneurs should engage in the production of domestic and industrial goods. And a long-term goal of exporting such goods to West/African markets should be brought into focus. Commercial farming into specialised areas of dairy farming, essential fruits such as apples, etc. will help to reduce unemployment. And a long-term goal of exporting such goods to West/African markets should be brought into focus.

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Indeed, whilst the first option (industrialisation) may offer a considerable solution, the second has more reward and comes with reduced risk. As a country desirous of achieving sustainable development, there are in my view both specific and specialised reasons for the government to throw its weight behind agriculture by creating an enabling environment that will encourage Nigerian youths to take to farming.

First, aside from the worrying awareness that by 2050, global consumption of food and energy is expected to double as the world’s population and incomes grow, while climate change is expected to have an adverse effect on both crop yields and the number of arable acres, we are in dire need of solution to this problem because unemployment has diverse implications.

Security-wise, the large unemployed youth population is a threat to the security of the few that are employed. Any transformation that does not have job creation as its main objective will not take us anywhere and the agricultural sector has that capacity to absorb the teeming unemployed youth in the country.

The second reason is that globally, there are dramatic shifts from agriculture in preference for white-collar jobs; a trend that urgently needs to be reversed.

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Take as an illustration; over the past years in the United States of America (USA), a study has shown that there exists a shift in the locations and occupations of urban consumers. In 1900, about 40% of the total population was employed on the farm, and 60% lived in rural areas. Today, the respective figures are only about 1% and 20%. Over the past half-century, the number of farms has fallen by a factor of three. As a result, the ratio of urban eaters to rural farmers has markedly risen, giving the food consumer a more prominent role in shaping the food and farming system. The changing dynamic has also played a role in public calls to reform federal policy to focus more on the consumer implications of the food supply chain.

Separate from job creation, averting malnutrition which constitutes a serious setback to the socio-economic development of any nation is another reason why Nigeria must embrace agriculture — a vehicle for food security and sustainable socio-economic sector. In fact, it was noted recently that in Nigeria, governments over the year have come to realize that sustainable growth is achievable only under an environment in which the generality of the people is exposed to a balanced diet, not just food. This explains why agricultural production should receive heightened attention. In Nigeria, an estimated 2.5 million children under five suffer from severe acute malnutrition (sam) annually, exposing nearly 420,000 children within that age bracket to early death from common childhood illnesses such as diarrhoea, pneumonia, and malaria.

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For us to, therefore, achieve this objective in agriculture that will guarantee food security as well as bring about development that is sustainable, it is important to say that what Nigerians need are practical solutions that are enduring. What the nation needs is not a blueprint but action plans.

Utomi is the programme coordinator (media and public policy) at Social and Economic Justice Advocacy (SEJA), Lagos. He could be reached via;[email protected] 08032725374

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