Poor but urbanising

Poverty in sub-Saharan Africa (SSA) increased to 58 percent in 1999 from 51 percent in 1981. Between 1999 and 2009, extreme poverty rate decreased by 10 percent. The World Bank in a recent report says the current rate at 48 percent (a decline of 17 percent in one decade) is “an impressive decline”.

Despite this, the number of poor individuals in SSA has risen steadily and dramatically to 414 million in 2010 from 205 million in 1981. In other words, three of 10 extremely poor individuals live in SSA. And their average income has remained flat: 87 cents a day.

However, there’s good news: urbanisation pulls people out of poverty. Eighty percent of global goods and services are produced in cities.

“Agglomeration, or the clustering of people and economic activity, is an important driver of development and evidence suggests that it can have high payoffs, particularly for countries on the lower rungs of development,” says Lynge Nielsen, a senior economist at IMF.

Though Africa is urbanised (40 percent of its population live in cities, according to McKinsey, a consultancy), poverty is prevalent in less urbanised regions of SSA. Urban areas of the region, relative to the rural areas, have better access to hospitals, sanitation facilities and safe water.

Access to these services, however, could be improved for the urban poor. Public services are crucial for harnessing the benefits of urbanisation. Otherwise the wealth in cities could be overshadowed by slums and crime – a quarter of the world’s 828 million slum dwellers are in Africa.

The haphazard development of the various communities has been responsible for rural-urban migration to cities such as Lagos, Kano and Port Harcourt. Those trooping daily to the city believe that what they cannot get in their rural or semi-urban areas can be found in cities.

Nigeria’s geographic diversity is under-utilised. Properly harnessed, it can turn regional disparities in socio-economic development between urban and rural areas and among different geographical areas into opportunities. With stable electricity supply and the promotion of industrial clusters – i.e., the location of industrial hubs weaved around natural endowment of the areas, for instance, cassava – can provide jobs for young school leavers, and thus stymie rural poverty and rural-urban migration.

It would not be out of place to site a cassava processing plant in such a place where it is predominantly grown. The same can happen in areas where yam, citrus, pineapple, cocoa, palm trees, groundnut, cotton and hide and skin abound. The end products of these processed commodities would also have a multiplier effect which could tremendously boost the economy. More jobs would certainly be created with more of the educated Nigerians likely to get involved in agriculture. Deliberate intervention, in the form of an efficient public transport system, will spur individuals and businesses to either allocate or reallocate their resources.

Inter-regional transportation will enable people and goods to commute between, say, Ilorin and Lagos. The same system could apply to a place like Abuja and Lokoja. A good transport network would be more convenient for a government worker to stay in Lokoja and work in Abuja.