A one-sided fight against poverty

A few weeks ago, we began a discussion of the nature and impact of bad loans on lending institutions and their clients, especially when requisite action is not taken, or taken belatedly. We are not done with the topic but something has intervened and we shall deal with the intruding event and later come back to the issue of delinquent loans. Enquiries into the efficacy of microfinance in dealing with its core objective of poverty reduction come in different frames. But whatever form they may take, they boil down to the simple matter of whether microfinance is still the king of all poverty reduction policy prescriptions. Thus, the question always is this: Is the buzz of microfinance waning?
This question has been asked in a number of fora that I attended, over the past several months, not only in Nigeria but also abroad. It resurfaced over the past weekend, while I was in Kenya. My first reaction used to be to wonder why anyone would ask such a question, given all the evidence of what microfinance is doing for the poor all over the world, including Nigeria. I concluded that it was out of ignorance, not only of the impact of microfinance on living conditions of poor people around the world, but also of the enormity of the challenge of poverty in many countries today, and Nigeria in particular. Overtime I have been studying the situation in Nigeria to have a better response to such questions if and when they pop up.
I am currently attending an Africa-wide conversation on the economic Integration of the continent, focusing on Intra-African trade and Competitiveness. By dint of some hard luck or something close to it, someone who said he reads this column called me aside, and after speaking very kind words that I felt were like fresh oil in my lamp for the nest mile of this column, he then dropped the bomb: “But sir, I sometimes wonder if our poverty reduction efforts are being adequately rewarded in terms of victory over the scourge”. I smiled in a way that neither betrayed my emotions nor indicated my approval of his question. The gentleman must have thought I missed the point of his question and so went on to amplify it. “Sir I mean to say that it does not appear that microfinance is reducing poverty as expected”. When I continued to smile, without addressing his topic, he joined me to smile. I think the poor man was unsure of what was going on and thought that we could at least share one thing together, even if it was an “unfounded smile”. So He too delivered a broad lingering smile. It was at this point that I began to speak in a manner he described as “elevated conversation on microfinance and its problems”.
I drew an analogy between poverty and flood water. I said to him that poverty and flood share a number of pathological commonalities and that it is only when we are at home with the genealogicalaffinity and underpinnings of these two kindred evils spirits that we can sustainably deal with them. Poverty is like a flood in many respects. First, poverty and flood are both disasters.They both have sources and follow a direction. The source of a flood may be a river that overflows its banks. Once it does, water escapes and begins a journey that may end up in people’s homes, farms or other human establishments. A flood may also be part of rain water flowing from higher groundsto the low lands.In all cases, there is a source or cause, effect and victim.
I told him the story of a sad flooding experience, which happened years ago in Nigeria’s South-west, which is still fresh on my mind – the Ogunpa Flood Disaster in Ogun State. It was so bad that the whole nation was touched and joined to mourn with that state, in addition to providing material support. I suppose that was when we still had our humanity in tack. With the way we shrug off the news of the massive killing of moms and their babies by “unidentifiable herdsmen” these days, some could validly say that Ogunpawould not have made the headlines if it happened today. But that was a flood disaster that was traced to a river by that name. Every flood has a source.
Similarly, every poverty attack can be traced to a cause, its source, from where, like a flowing river, takes its source. The poverty in Nigeria is a derivative of the many years of visionless leadership by people whose only interest is either their personal estates or the supremacy of their kit and kin over other people – a sad combination of evils unexpected of anybody privileged to lead a nation. These twin bads have led to policy decisions that either were deliberately intended to deprive one group and thus impoverish them or inadvertently brought harm to citizens. Nigeria, according to the Department of Petroleum Resources website, had proven gas reserves of about 198.7 trillion cubic feet. Its unproven or potential gas reserves is 600 trillion cubic feet, according to the Nigeria LNG. In fact, Nigeria is described as a Gas Province “with some oil”. What a waste! If any other country in Africa was so rich and so described, Africa would have been better today. So poverty in Nigeria is a creation of its leadership. If that is settled, I said to him, then fix the leadership and leave poverty to fix itself.
I then turned to the issue of effectiveness of microfinance. Nigeria is not among the microfinance nations of the world even though it needs it more than others. Unknown fact! Of the top 100 microfinance providers in the world, none is domiciled in Nigeria. Only Egypt and Morocco are featured in that list, yet their poverty needs are a microcosm of Nigeria’s. Ecuador with a population of about 17million people has about 9 MFI in that list. Relative to its population and the number of those abjectly poor, Nigeria is actually not in the microfinance business. Again, not only are our MFIs very small and weak, they are very few in number.I had once compared our MFI industry with South Africa’s, when it was at the stage we are now. They were over 3500 MFIs compared to our 1000.The share size of the poor dwarfs the effort of the MFIs in Nigeria.
Finally, I told the man that one big reason that guarantees the ineffectiveness of our microfinance effort is the activities of herdsmen. For as long as they continue to attack, overrun and occupy farming villages unchallenged, microfinance as an instrument of poverty alleviation will be like adrop in the ocean. As one village is “captured” in this raging undeclared war, the peasants in the next stay off their farms. When they do, their only hope is to die in the streets or IDP camps. By now the young man’s jaws had dropped so low that one could count his teeth. He turns to walks away but said “we are fighting poverty without looking at its causes. A one-sided fight against poverty will surely fail”.

Emeka Osuji